ACCC action against Phoenix Institute welcomed in WA

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All announcements issued prior to 1 July 2017 were issued by the former Department of Commerce. Announcements listed here are the latest versions available, but may be subject to review. For more information on this announcement, please contact online@dmirs.wa.gov.au.

Consumer Protection WA welcomes legal action by the Australian Competition and Consumer Commission against a training provider that allegedly offered free laptops or iPads to vulnerable people in order to sign them up for supposedly Government-funded courses, which would in reality leave the person with a significant student debt.

Following an investigation into the conduct of private colleges, the ACCC and the Commonwealth (for Department of Education and Training) instituted proceedings in the Federal Court against Phoenix Institute of Australia Pty Ltd (trading as Mytime Learning) and Community Training Initiatives Pty Ltd.

It is alleged that Phoenix Institute made false or misleading representations and engaged in unconscionable conduct, in breach of the Australian Consumer Law (ACL), during face-to-face marketing and door-to-door selling of VET FEE-HELP funded courses between January 2015 and October 2015. More than 9,000 students in New South Wales, Victoria, Queensland, Northern Territory and Western Australia were enrolled on 17,000 courses (most in double Diplomas) resulting in Phoenix being paid more than $100 million by the Commonwealth.

Community Training Initiatives (CTI) allegedly assisted Phoenix Institute by providing administrative support and processing the enrolment forms. It is alleged CTI aided and abetted, counselled or procured or was knowingly involved in the alleged unconscionable conduct.

The ACCC’s full media statement can be viewed at www.accc.gov.au/media-release/accc-takes-action-against-phoenix-following-joint-investigation-with-nsw-fair-trading and a Directions hearing is due to be heard on the 15th of December 2015.

Acting Commissioner for Consumer Protection Gary Newcombe says allegations received by Senior Regional Officers in the Kimberley, Mid-West and South West WA were extremely concerning. Some were reported by the police, financial counsellors and community workers.

“There was a common theme that consumers being signed up for Diplomas were from lower socio-economic backgrounds, perhaps had not completed high school education or had intellectual disabilities, English was not necessarily their first language and some had a large number of children to care for. This meant their ability to commence or complete a course was highly questionable.

“Generally they did not seem to have understood that they would be left with a student debt to be repaid once their income reached a certain level and no paperwork had been left with them. However, their secure personal information including tax file numbers and copies of driver’s licences were taken,” he said.

At the time, Consumer Protection issued a number of warnings to Western Australians, particularly those in remote and regional communities, about door-knockers offering ‘free’ laptops to people who sign up for courses.

Mr Newcombe says investigations into the conduct of private colleges continue and Consumer Protection would still like to hear from affected people.

“Any consumers in WA who have unknowingly signed up for a Commonwealth Government ‘Vocational Education and Training (VET) FEE-HELP’ loan and have not yet lodged their details with Consumer Protection are strongly encouraged to do so by calling 1300 30 40 54 or emailing consumer@commerce.wa.gov.au.

“Since April 2015, VET FEE-HELP training providers have been banned from offering enrolment inducements to students, so promises of a free laptop breaks Federal Government rules around the loan-scheme. In addition to this there are potential Australian Consumer Law breaches in relation to false or misleading representations and unconscionable conduct.”

Consumers thinking about signing up for any training course are encouraged to research options available to ensure they make the right choice. Check www.training.gov.au to see whether a training provider is registered to provide a certain course. You can also visit the www.studyassist.gov.au site to see whether a course provider is approved to offer VET FEE-HELP loans.

Recently Consumer Protection wrote to training providers to remind them of their obligations under the Australian Consumer Law. A factsheet included within this communication can be found online: http://www.commerce.wa.gov.au/sites/default/files/atoms/files/trainingac...

Media contact (Consumer Protection)

Consumer Protection
Media release
26 Nov 2015

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