Education software supplier Compass Matin Pty Ltd and its contract manager EduCollect Pty Ltd have admitted to using unfair contract terms in the supply of their CAMI and iTutor home tutoring programs.
Compass Matin supplied Maths and English tutoring software programs for primary and secondary students under the CAMI and iTutor brands until April 2020. EduCollect provided contract management services to, and received payments for, Compass Matin. Both companies had the same director, Mr Stephen Palframan.
"We started investigating Compass Matin and EduCollect when we received complaints about the companies misleading consumers and locking them into expensive, long-term contracts," ACCC Deputy Chair Mick Keogh said.
Between July 2018 and November 2019, Compass Matin used contracts which included a term requiring consumers to pay an amount equivalent to the full amount of the contract if they wanted to terminate the contract early, which in some cases amounted to thousands of dollars.
Prior to that, between January 2014 and July 2018, EduCollect enforced contracts that required the consumer to pay an amount equivalent to six months of subscription fees in order to terminate early.
Compass Matin and EduCollect have admitted that these contract terms were unfair.
"We were concerned that Compass Matin and EduCollect were using unfair contract terms which excessively penalised consumers who tried to end their contracts early," Mr Keogh said.
Compass Matin has also admitted that it made false or misleading representations to consumers about free tutoring lessons, in breach of the Australian Consumer Law.
This conduct occurred between July 2018 and November 2019 when telemarketers told consumers that they had won a free tutoring lesson and that a 'tutor' would visit their home to provide a free lesson for their children.
Consumers were not told that the person visiting their home would be a sales agent, and that the purpose of the visit would be to sign them up to a long-term contract for CAMI or iTutor. Promotional flyers containing similar messages were also distributed to prospective consumers.
The ACCC has accepted court-enforceable undertakings from Compass Matin and EduCollect, and from the companies' common director, Mr Stephen Palframan.
Compass Matin has undertaken to provide full refunds to some consumers who were misled and partial refunds to others.
It will also provide some consumers, with the option to exit their contracts early without penalty. Compass Matin will contact consumers who may be eligible for a refund via email or letter in the coming weeks. Eligible consumers should follow the steps set out in the email or letter in order to seek a refund.
Compass Matin has agreed that future contracts will allow a consumer to terminate their contract without penalty up to 20 business days after signing the contract, or up to 10 business days after they receive access to the educational product or services.
Mr Palfaman has given the same undertaking in relation to any future companies that he is closely involved with that supply educational tutoring products, in circumstances where the company initiates contact with the consumer.
The companies have undertaken to implement a compliance program.
Copies of the undertakings can be found on the public register: Compass Matin Pty Ltd, EduCollect Pty Ltd and Stephen Eric Palframan
Background:
CAMI and iTutor are subscription-based education products targeted at school-aged children.
Compass Matin supplied the tutoring software programs for primary and secondary students. EduCollect provided contract management services and received payments for Compass Matin.
Consumers typically entered into 12 or 24-month subscription agreements following a telemarketing call and a sales presentation from a Compass Matin representative at the consumer's home.
Mr Palframan is the director of Compass Matin, EduCollect, and other companies linked to the educational software sector.
