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ACCC hits up Phoenix for $106 m

Fairfax Media    |     25 November 2015

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The Australian Competition and Consumer Commission (ACCC) has accused leading VET provider Phoenix Institute of false, misleading and unconscionable conduct and is seeking recovery of $106 million in Commonwealth funding through VET-FEE HELP.

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Phoenix

The ACCC launched legal action in the Federal Court on 25 November 2015 alleging:

Phoenix represented to prospective students that they would receive a free laptop and that the course(s) were free or were free if the consumer did not earn approximately more than $50,000 per annum.  In fact, the laptop they received was on loan, and students enrolled in the courses incurred a VET FEE-HELP debt payable to the Commonwealth Government.  Repayment of this debt would commence if they earned more than a specified amount in a financial year ($54,126 in the 2014-2015 income year).

It is also alleged Phoenix’s conduct, including its marketing and enrolment system and its dealings with vulnerable consumers was, in all the circumstances, unconscionable.

The alleged victims included those with intellectual disabilities, and people on Aboriginal communities. Sales people authorised by Phoenix signed them up to multiple online diploma courses which cost $18,000 each, even though some did not have access to the internet.

The Australian Skills Quality Authority (ASQA)has also announced that it proposes cancelling Phoenix Institute’s registration as a training organisation, meaning it will then be ineligible for further government funding.

ACCC chairman Rod Sims said the Commonwealth “is paying for something they are simply not getting”:

Think about this: it’s a company that has got revenue from the Commonwealth of over $100 million between January and October this year; companies with that much revenue are sizeable companies and there are not many of them in Australia – think BHP, the banks and so on. It’s a lot of money.

Despite all the taxpayer funds, however, the rate of people actually starting the courses was “extremely low”, he said.

Phoenix College is owned by listed Australian company, Australian Careers Network (CAN), whose chairman is retired Sydney-based lawyer Steve Williams, who is also the chairman of Sydney Church of England Grammar (Shore).  Former Victorian Liberal higher education minister Peter Hall is on its “Quality Oversight Committee”, and sources say he has been active in lobbying the state government on the company’s behalf.

The company has been in trading halt since early October, which was recently extended to 15 December  as ACN insists it can clear its name.  It said it will vigorously defend the proceedings

A directions hearing is set for 15 December.

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