Careers Australia Admits to Breaches of Australian Consumer Law

Tuesday 17 May 2016 @ 9.34 a.m. | Legal Research | Trade & Commerce

As reported in a recent ACCC Media Release, a major training provider has admitted it broke consumer law and will pay back some of the millions it received in government-backed training loans.

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Careers Australia Group Limited (Careers Australia), following concerns about its marketing of VET FEE-HELP courses.

Background

The ACCC was concerned and Careers Australia now admits that, through the conduct of some of its agents in door-to-door marketing across Australia, it made false or misleading representations and engaged in unconscionable conduct, in breach of the Australian Consumer Law (ACL) [which is contained in Sch 2 to the Competition and Consumer Act 2010 (Cth)]. The conduct included misrepresenting that the courses were free, misrepresenting that the courses would allow consumers to find employment or would increase their chances of finding employment, and offering inducements such as iPads and laptops and claiming they were provided for free if the consumer signed up to the courses.

This included allowing 80 consumers from a remote Aboriginal community in Yarrabah, Queensland to be enrolled in courses and incur debts without alerting them to the fact they would incur a debt.

Reaction from the Consumer Watchdog

The ACCC Chairman Rod Sims said:

“This conduct affected some of the most vulnerable and disadvantaged groups of consumers in Australia. For example, it is unacceptable that Career Australia allowed 80 consumers from a remote Aboriginal community in Yarrabah, Queensland to be enrolled into courses and incur debts when they were offered inducements to sign up but not alerted to the debts they would incur. It is also unacceptable that significant Commonwealth money went to fund courses that were often not undertaken.”

Careers Australia has repaid $44.3 million to the Government after it cancelled 12,130 bogus enrolments. This included students who were signed up but never actually undertook any study.

The alleged offences

Between 1 August 2013 and 31 March 2015, Careers Australia received and processed applications from around 40,000 students for enrolments into its VET FEE-HELP courses. Of these students, 20,242 were enrolled and incurred a debt to the Commonwealth. Careers Australia received approximately $190 million worth of payments from the Commonwealth in relation to these students.

Careers Australia takes remedial action

Pursuant to the undertaking, Careers Australia will also invite other students who may have been misled to approach them should they want to have their enrolment and debt cancelled. Careers Australia has undertaken to:

  • inform students on its website and at its 15 campuses across Australia about the potential availability of having their enrolment and debt cancelled;
  • implement an ACL Compliance Program, including training for staff and regular reviews; and
  • not engage in the conduct of concern in the future.

Careers Australia has since cancelled at least 12,130 of these student enrolments and either repaid or partially repaid to the Commonwealth amounts totalling at least $44.3 million, including cancellations made in the course of the ACCC investigation. In addition, if the enrolments had not been reversed, Careers Australia could have received payments upwards of $300 million from the Commonwealth.

The ACCC Chairman commented:

“The ACCC acknowledges that Careers Australia cooperated with our investigation and worked to address the problems, which is why we have accepted the undertaking rather than taking court action. The ACCC will continue to investigate the education sector and take appropriate action to ensure consumers are not misled about the nature of courses and the debts they will incur.”

About Careers Australia

Careers Australia opened its doors in 2006 and is one of the largest private training colleges in Australia with 15 campuses around the country.

This is the fifth college to face action from the ACCC, which has said it has about 10 colleges it will be investigating.

In a statement, a Careers Australia spokesman said the company self-reported concerns to the regulator in April 2015 after their own internal systems alerted them to issues.

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.

Sources:

Careers Australia undertakes to repay Commonwealth for VET FEE-HELP diploma courses – ACCC Release MR 79/16

Private training provider Careers Australia to pay back $44m to Government, consumer watchdog says – abc.net.au 

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