Foreign students and IT graduates who paid for an IT course conducted by Zanok Technologies Pty Ltd were misled and deceived about the course and exploited by unconscionable conduct, the Federal Court has declared.
In an Australian Competition and Consumer Commission initiated action, the court found Zanok, Darley Stephen and Vanitha Darley, both Indian nationals residing in Australia, had engaged in misleading and deceptive and unconscionable conduct toward the students and graduates.
The ACCC alleged that Zanok had put job advertisements on various websites including MyCareer, Seek and Gumtree, offering various IT positions, when Zanok was not offering job opportunities but rather "IT training" for which applicants must pay up to $4,700.
The ACCC alleged that despite assurances from Zanok and its agents, there was no guarantee of a job at the end of the training. The ACCC also alleged that the training was unstructured, disorganised and of no value.
Justice Edmonds declared on Friday that Zanok engaged in unconscionable conduct by requiring foreign IT job seekers to pay for IT training in circumstances where it knew, or ought to have known, that the job seekers were seeking paid jobs in the Australian IT industry and not IT training. Further Zanok knew, or should have known, that the students were typically from overseas, needed jobs to become permanent residents and only paid for the training because of the guarantee of paid employment at its end.
Justice Edmonds said that the conduct "constituted more than simply taking advantage of a superior bargaining position but involved an unconscientious exploitation of another's inability or diminished ability to conserve his or her own interests."
The court also declared that Zanok engaged in misleading and deceptive conduct by making representations to IT job seekers on its websites, in job advertisements placed by Zanok or on its behalf, and in statements made in interviews and during training inductions, that:
- Zanok is a global company that has developed and sells functional IT software, when this is not in fact true
- Zanok had paid employment opportunities in Melbourne and Sydney, when in fact Zanok was offering IT training for which applicants would be required to pay a fee of up to $4,700
- Zanok was offering IT scholarships, when this was not in fact true
- Zanok was offering an unqualified guarantee of paid employment on completion of IT training, when in fact it was not in a position to guarantee paid employment to all persons who completed the training course
- Zanok would pay all persons who completed the training course a salary of a minimum of $45,000, when in fact it was not in a position to pay that salary to all persons who completed the training course, and
- Zanok offered a referral program whereby trainees would be paid $200 for each individual they referred to Zanok who signed up for the IT training course, when in fact none of the trainees who have referred others to the program have received payment.
The court also declared that Zanok accepted money for IT training when Zanok intended to supply training that was materially different from the promoted training, or knew, or should have known, that it would be unable to supply the training for which payment was accepted.
The court declared that Zanok's directors were knowingly concerned in the conduct of Zanok.
The court made various injunctions restraining the future conduct of Zanok and its directors. These included an order restraining them for a period of five years from soliciting persons who are seeking employment to enter into an agreement in relation to IT training or make payment for IT training, until a cooling off period of seven days has passed after the person is made aware that they are required to complete paid training.
The court ordered that the respondents pay the ACCC's costs.
"This case sends a clear message that the ACCC will not hesitate to take action against persons who seek to take advantage of, or mislead, international students and those seeking residency in Australia about training courses or job opportunities," ACCC chairman, Graeme Samuel, said today.