A TRAINING company which collected nearly $140 million in government loans through allegedly selling diploma courses to disadvantaged consumers could be forced to pay the money back to the government.
The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court against Unique International College Pty Ltd following a joint investigation with NSW Fair Trading. It comes just weeks after the business was deregistered by the industry regulator.
The ACCC alleges Unique offered prospective students a free laptop, and in doing so, represented that the courses were free or would be free if the consumer did not earn more than around $50,000 per annum.
The watchdog will also allege that Unique’s conduct, including its marketing and enrolment system and its dealings with some consumers, was “in all the circumstances, unconscionable, in contravention of the Australian Consumer Law”.
ACCC Chairman Rod Sims said the conduct allegedly targeted some of the most vulnerable groups in the Australian community. “We allege [Unique] set up stalls in the main street in public housing areas, marketed door-to-door in remote, often indigenous communities and other low socio-economic areas,” Mr Sims told news.com.au.
“It meant that they had a business system designed to sign people up who may well have had very little interest in the course, may not have known what they were signing up for, and yes, they made a lot of money off the Commonwealth.”
It’s potentially a landmark legal case which could spell the beginning of a government clawback of VET FEE-HELP fees, with the ACCC and the Commonwealth seeking the repayment of course fees paid by the Commonwealth to Unique in respect of any loans which are cancelled by court order.
“We’ll be pressing for a return of the money,” Mr Sims said. “That’s very unusual, and well warranted in the circumstances. It’s a unique feature, pardon the pun, of what we’re doing.”
Mr Sims said there were a number of other cases against training colleges in the works.
“We are particularly concerned that unscrupulous door-to-door marketing practices previously used in the energy sector are now appearing in the education sector,” he said in a statement.
“The joint investigation illustrates how seriously both agencies view these allegations. The ACCC and NSW Fair Trading are continuing to investigate the conduct of private colleges in the education sector.”
NSW Fair Trading Commissioner Rod Stowe said: “It is alleged that the sales process used by Unique included free incentives, unfair tactics and the failure to provide clear and accurate information about the price of the courses and the nature of the VET FEE-HELP loan.
“It is important that colleges are upfront with prospective students and clearly explain the price of the courses they are offering. Consumers need to be able to fully understand what they are agreeing to before making a decision to sign up to a course. The VET FEE-HELP loan incurred by students is a lifetime debt.”
The ACCC is seeking the declarations, injunctions, redress for affected consumers by cancelling debts and the repayment of fees, pecuniary penalties, costs, corrective notices and orders requiring the implementation of a consumer law compliance program.
The matter has been filed in the Federal Court’s Sydney Registry. The first Directions Hearing is set for 24 November 2015 at 9.30am before Justice Perram.
$140 MILLION IN FEES
Unique International College charged $22,000 for a Diploma of Management, $25,000 for an Advanced Diploma of Management, $24,000 for a Diploma of Marketing and $25,000 for a Diploma of Salon Management.
Education Department figures show since its approval as a VET FEE-HELP provider on 4 December 2013, Unique International College has received exactly $139,945,468.44 in VET FEE-HELP payments to date
Unique International College students had a completion rate of just 5.8 per cent. Between 1 July 2014 and 30 December 2014, that figure was 2.4 per cent.
The operation was brought to a screeching halt earlier this month, with the vocational training regulator, the Australian Skills Quality Authority, deregistering the education company — the only business to be hit with the sanction following a six-month audit into 21 registered training organisations (RTOs).
A spokesman for ASQA would not say in what areas Unique International College was allegedly found to be noncompliant. “We take action to cancel someone’s registration usually in very serious circumstances of serious noncompliance with the various national standards,” he said.
ASQA has the power to issue infringement notices ranging from $2160 to $10,800 for breaches of standards. Earlier this month, Vocational Education and Skills Minister Luke Hartsuyker introduced tough new legislation increasing potential fines to $54,000 per breach.
The regulator has to date issued only three infringement notices totalling $6120 to three non-registered training organisations “for advertising or offering a VET course without identifying the issuer of VET qualifications”.
ASQA would not comment on whether there were any pending infringement notices for Unique International College but said there were “a few more in the system in the process of being finalised”.
“It’s not as simple as the police issuing a fine,” the spokesman said. “We have to investigate and build a brief of evidence.”
In a statement last week, Unique College International CEO Amarjit Singh told news.com.au Unique was “disappointed” by ASQA’s decision and would be seeking a review with the Administrative Appeals Tribunal. “Unique is committed to providing highest quality education and support services for its students and continuing to meet all of its accreditation requirements,” he said.
It has been alleged countless for-profit private education providers have lined their pockets as a result of the poorly designed system. A University of Sydney study has estimated that some RTOs are raking in profit margins of more than 50 per cent through VET FEE-HELP loans.
Education Department figures show the VET FEE-HELP scheme ballooned to $1.76 billion in 2014. An estimated 40 per cent of those loans will never be repaid as the students will never earn above the repayment threshold.
A recent Senate committee inquiry into the sector included a submission from the Canterbury Bankstown Migrant Interagency recounting its dealings with Unique International College.
In March 2014, a group of senior citizens from Bankstown, all with limited English, were talked into enrolling in ‘computer classes’ with Unique International College.
“It turned out that there was no computer class and they were all enrolled in different diploma courses and filled out forms to take out VET FEE-HELP,” the submission said.
“They were each offered a free computer/iPad or $1000 cash by taking out the loan. They were told there no need to come to class, but if they wish, they could come and free lunch will be offered.”
In April, under a crackdown by former Assistant Education Minister Simon Birmingham, providers were banned from attracting students into training course by offering incentives such as cash, meals, prizes or laptops.
Last year, The Daily Telegraph reported of fights breaking out at the Tregear Community Centre when the Granville-based college held a promotional day to sign up students for diploma courses.
The college expected no more than 30 or 40 applicants but four staff were overwhelmed when about 100 people turned up.
Mr Singh said his staff made it “very clear what people were signing up to”. “We had angry customers because we could not take them all,’’ he told The Daily Telegraph.
“Every year thousands of students from every part of the world come to Australia for their further studies simply because Australia is delivering world class top quality education and maintaining strict high standards at all times,” Mr Singh wrote in the 2012 student handbook.
“By enrolling into Unique International College you are entering a world of opportunity, a place where dreams come true and often take shape for the first time.”