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Category: Education / Adult Education / Federal Government / Consumer Protection

Private training provider forced to repay millions over bogus enrolments

Monday, 16 May 2016 12:41:11 | Alison Branley

University students sitting in a lecture theatre (ABC News)

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.

Key points:

  • Careers Australia admitted to engaging in unconscionable conduct
  • The ACCC says the training provider targeted some Australia's most vulnerable consumers
  • Under an agreement with the ACCC students can have debts cancelled

Careers Australia has come to an agreement with the Australian Competition and Consumer Commission (ACCC) to repay to the Australian Government any funds it obtained by signing up vulnerable students using false claims.

It has been forced to repay $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.

If those enrolments had not been reversed it would have cost the Commonwealth more than $300 million.

Careers Australia has received $190 million from the Government since 2013 under the VET-FEE-HELP student loan scheme, which extended HECS-style loans to students studying diploma courses.

During 2013 and 2015 Careers Australia signed up 40,000 students and officially enrolled about half that number, signing them up to student debts.

Today in a statement from the ACCC the company admitted that through the conduct of some its door-to-door agents, the company made false or misleading representations and engaged in unconscionable conduct.

Do you know more about this story? Email investigations@abc.net.au

This included misrepresenting that its courses were free, would help people find jobs and offering inducements such as free iPads.

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

"This conduct affected some of the most vulnerable and disadvantaged groups of consumers in Australia," ACCC chairman Rod Sims said.

"It is also unacceptable that significant Commonwealth money went to fund courses that were often not undertaken."

Students can have debt cancelled under agreement

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

Under the agreement with the ACCC, Careers Australia will also tell students they can have their debt cancelled, train and review its staff and agree to behave better in the future.

Mr Sims said he wanted to acknowledged that Careers Australia cooperated with its investigation and that was why they accepted the measures as court enforceable undertaking.

This is the fifth college to face action from the ACCC, which has said it has about 10 colleges in its sights.

AustraliaPlus


 

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