The Full Federal Court has upheld an appeal by Unique International College Pty Ltd (Unique) and dismissed a cross appeal by the ACCC and the Commonwealth (on behalf of the Department of Education and Training). The Full Court found that Unique did not engage in a system of unconscionable conduct regarding the enrolments of vulnerable consumers into diploma courses.
In June 2017, the Federal Court found Unique had engaged in systemic unconscionable conduct in New South Wales by targeting disadvantaged consumers with offers of free laptops, providing financial incentives to its sales representatives, and hosting sign-up meetings to enrol students.
Unique appealed against the systemic unconscionable findings of the Court. The ACCC and the Commonwealth filed a cross appeal that the trial judge ought to have found that the systemic unconscionable conduct also occurred in Victoria and Queensland. The ACCC and the Commonwealth also argued that Unique’s system had further features that contributed to the unconscionability of Unique’s behaviour.
The Full Court allowed the appeal, on the basis that there was insufficient evidence to support the primary judge’s finding that Unique’s conduct amounted to a system of unconscionable conduct and dismissed the cross appeal and the additional elements put forward by the ACCC.
“The ACCC took this case as we believed Unique deliberately targeted vulnerable groups in the Australian community. Only 2.4 per cent of the people who signed up to and commenced Unique’s courses between 1 July 2014 and 30 December 2014 completed their course,” ACCC Chair Rod Sims said.
Unique did not appeal the trial judge’s findings that it engaged in misleading and deceptive and unconscionable conduct in relation to five consumers who gave evidence in the trial. The Court found that Unique represented to these consumers that their courses were free, when in fact they were incurring a debt of up to $25,000 per course under the VET FEE-HELP scheme.
The case will revert to the Federal Court to determine relief. The ACCC and the Commonwealth are respectively seeking pecuniary penalties, redress for the five affected consumers by cancelling their enrolments and debts, and the repayment of the funds paid to Unique by the Commonwealth.
The ACCC has taken action against a number of private colleges. Today the Federal Court found that another college, Cornerstone Investments Pty Ltd (trading as Empower College), made misrepresentations and engaged in misleading or deceptive and unconscionable conduct.
Background
The ACCC and the Commonwealth (on behalf of the Department of Education) took action against Unique in October 2015 following a joint investigation with NSW Fair Trading into the training colleges sector.
In the 2014-15 financial year, Unique enrolled over 3,600 students in its diploma courses and was paid approximately $57 million by the Commonwealth for those enrolments.
Unique sold VET FEE-HELP diploma courses that cost between $10,000 to $25,000. In 2014 and 2015, Unique sales staff used tactics including door-to-door sales in vulnerable and disadvantaged communities. Several of those people enrolled by Unique lived in former Aboriginal missions in Bourke, Wagga Wagga, Walgett and Taree.
The ACCC is continuing proceedings against the following private colleges:
- AIPE (which has received $210 million from the Commonwealth), which is being heard in the Federal Court this week, and
- Phoenix and Community Training Initiatives (which received $106 million from the Commonwealth).