The Federal Court has found that Productivity Partners Pty Ltd, trading as Captain Cook College, engaged in a system of unconscionable conduct and made false or misleading representations to prospective students in relation to online diploma courses following contested proceedings.
The Court found Captain Cook College implemented a system of unconscionable conduct from 7 September 2015, when it removed consumer safeguards from its enrolment and withdrawal processes for online courses under the former VET FEE-HELP loan program to improve its financial performance.
During a period of about three months following these changes, Captain Cook College enrolled over 7,000 consumers in online courses in subjects such as business, project management and human resource management, and claimed over $50 million from the Commonwealth under the VET FEE-HELP program for about 6,000 of those consumers.
"Captain Cook College enrolled vulnerable and disadvantaged consumers in courses they were unlikely to ever complete or receive any vocational benefit from despite incurring a large VET FEE-HELP debt. Over 90 per cent of the affected consumers did not complete any part of their online course, and about 86 per cent of them never even logged into their course," ACCC Chair Rod Sims said.
"Captain Cook College engaged in egregious conduct that sought to maximise its profit at the expense of students who were left with a debt and at the expense of the Commonwealth, which made substantial payments under the VET FEE HELP scheme, which was funded by taxpayers."
The Court found that "…the college well knew that its dramatic increase in revenue and turnaround in profits was substantially built on [VET FEE-HELP] revenue in respect of students who may have been the victims of [course advisors'] misconduct, were unsuitable for enrolment, should not have been enrolled and who would gain no benefit whatsoever from their enrolment, yet who incurred very substantial debts to the Commonwealth as a result of their enrolment."
In addition, Captain Cook College was found to have breached the Australian Consumer Law in its dealings with five individual consumers by engaging in unconscionable conduct, making false or misleading representations and failing to comply with the requirements for unsolicited consumer agreements.
The Court also found that the college's parent company, Site Group International Limited (Site Group) and its former chief operating officer Blake Wills were knowingly concerned in Captain Cook College's system of unconscionable conduct.
The Court will decide penalties and other orders in relation to Captain Cook College, Site Group and Mr Wills at a later date.
As part of a settlement with the ACCC in June 2020, former Captain Cook College CEO Ian Cook admitted that he was knowingly concerned in Captain Cook College's system of unconscionable conduct. The Court disqualified Mr Cook from managing corporations for three years and ordered that he pay $250,000 in penalties and make a contribution towards the ACCC's costs.
The Commonwealth has already cancelled the debts of eligible consumers enrolled with Captain Cook College between 1 January 2015 and 31 January 2016 under the VET FEE-HELP Student Redress Measures. This includes all consumers that were affected by Captain Cook College's system of unconscionable conduct that did not complete any part of their course.
Note
The VET FEE-HELP Student Redress Measures came into effect on 1 January 2019. The measures provide a remedy for eligible students who, due to the inappropriate conduct of their VET provider, incurred debts under the VET FEE-HELP loan scheme.
If you were affected, contact the VET Student Loans Ombudsman (part of the Office of the Commonwealth Ombudsman) who will assess and investigate your complaint.
If it's confirmed you incurred your debt because of inappropriate behaviour by your provider, the Ombudsman may make recommendations to the Department of Education, Skills and Employment to cancel your VET FEE-HELP debts.
More than $2.8 billion in VET FEE-HELP debt has been re-credited to over 152,800 students since 2016, the majority through the VET FEE-HELP Student Redress Measures.
Background
Productivity Partners Pty Ltd trading as Captain Cook College was a provider of online VET FEE-HELP diploma courses.
Captain Cook College was established in 1998, and was acquired by Site Group (ASX:SIT) in 2014. It ceased substantive trading at the end of 2016.
The ACCC commenced proceedings against Captain Cook College, Site Group, Mr Cook and Mr Wills in November 2018. This is the ACCC's fifth action in which the Court has found that a VET FEE-HELP provider has engaged in misleading and unconscionable conduct.
The ACCC and the Commonwealth have previously obtained judgments in relation to educational colleges against Unique International College, Cornerstone Investment Aust Pty Ltd (trading as Empower Institute), Australian Institute of Professional Education and Acquire Learning. The ACCC also instituted proceedings against Phoenix Institute of Australia Pty Ltd and Community Training Initiatives Pty Ltd, and is awaiting judgment from the Federal Court in that matter.
