ACCC teaches educational service provider an $8M lesson

An educational consulting company, which left thousands of students out of pocket and without the qualifications they had been promised has been found to have engaged in misleading, deceptive and unconscionable conduct.

Background

Get Qualified Australia Pty Ltd (Get Qualified) offered educational consulting services to consumers seeking recognition of their prior learning, in order to gain qualifications. Get Qualified lead consumers to believe that by signing up to their services, they would be eligible to obtain Recognition of Prior Learning (RPL) qualifications in industries such as beauty, construction and business.

RPL is an assessment process whereby students are able to obtain acknowledgment of their previous work experience or prior study in order to achieve credit towards a qualification.

Get Qualified mislead consumers to believe it could guarantee qualifications, when in reality it had no power to issue any qualifications. Further, the company was known to enrol consumers without confirming they had the documentation necessary to make an application and without explaining the RPL process.

Since 1 January 2015, more than half of the consumers that were signed up and charged fees ranging from $700 to $8,500 did not obtain the qualification they were seeking. The ACCC estimates this number to be around 5,000.

Federal Court’s Decision

The Federal Court found that Get Qualified targeted vulnerable consumers with misleading and deceptive conduct that was also unfair and unreasonable.

The Court noted in its decision that Get Qualified engaged in misleading and deceptive conduct by:

• telling consumers they were eligible for qualifications when they had no information to support this;
• demanding full payment be made upfront, and only providing critical information regarding a consumer’s eligibility for a qualification afterwards;
• telling consumers they were entitled to a refund if they were unable to secure a qualification, despite later refusing refunds;
• using sales tactics designed to unfairly pressure consumers; and
• deliberately exploiting a position of unequal bargaining power.

The Federal Court ordered Get Qualified to pay a pecuniary penalty of $8M.

Lessons to be learnt

1. Consumers must be provided with accurate and relevant information in order to make informed decisions before entering into agreements;
2. The use of unfair sales tactics, such as deliberate misinformation and undue pressure may amount to unconscionable conduct; and
3. A service should not deliberately mislead a consumer to believe a refund is available is in circumstances where it is not.

If you have any questions relating to this decision or misleading and deceptive conduct or other rights under the Australian Consumer Law please contact Paul Kirton or Kelly Dickson.

This article was written by Annabelle Uebergang, Graduate Lawyer – Commercial.