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On Wednesday, 18 May 2016, Consumer Action’s Director of Policy & Campaigns Denise Boyd gave a speech to the ACPET National Conference on telling the stories of our clients who have been impacted by the the VET FEE-HELP scandal. An edited transcript of the speech can be found below.

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I’d like to thank Rod and ACPET team for inviting me to speak today. I acknowledge the Traditional Owners of the country we meet on today, and pay my respects to their elders past and present.

For those that don’t know Consumer Action Law Centre, we are a Melbourne-based consumer organisation. We provide free legal advice and representation to Victorian consumers, free financial counselling as part of the National Debt Helpline, and we promote the consumer interest through policy and campaign activities.

We are the largest specialist consumer legal practice in Australia. As well as working with consumers directly, Consumer Action provides legal assistance and professional training to community workers who advocate on behalf of consumers.

Our mission is “Just outcomes, for and with consumers” – and we are committed to challenging business models and practices that disadvantage consumers. We want to ensure that all consumers, particularly those who are vulnerable and disadvantaged, can benefit from fair and effective competition in the marketplace.

The reason I’m here today is because Consumer Action has found itself advising and representing a growing number of Australians in Victoria who have been let down by the VET FEE-HELP funding system.

Some of what I say today might challenge you. But I hope you will give me some time to reveal how vulnerable people have been, and are, being hurt by this system. There’s been some progress but there is still plenty of work ahead to undo the damage.   We heard the Minister talk about this in strong language this morning, and I for one am encouraged that there will be further reform.

Our practice litigates on behalf of vulnerable Victorians, particularly those impacted by contraventions of the Australian Consumer Law.  What we learn from taking on their cases informs our advice to legislators and policy makers.

So why did we get involved with VET FEE-HELP? (pause)

Well, for our clients anyway, it was never an education issue….

The complaints we received were only occasionally about the quality of the education, how easy the online portal was to use, or whether students were able to find employment at the end. Most people who came to us had barely logged-on, let alone made a genuine attempt to complete the course.

One of our clients, Jillian (not her real name), enrolled with a private provider to study a Diploma in Counselling. Jillian was computer illiterate, and told the representative this before signing up.

She was assured that the online study is ‘very simple and self-explanatory’, and that studying online was pretty much the same as studying on campus at TAFE.  The agent said she would receive regular contact to provide support and help keep her on track.

Jillian enrolled and was given books and access to the website but from then on she received almost no contact from the provider. She struggled to complete tasks and locate research materials (unsurprising given her declared lack of computer skills) and she felt isolated and unsupported.

This case study will resonate with anyone who has studied online.  Online study is obviously cheaper for the provider, and expand learning opportunities for people in remote and rural Australia (assuming they can get online!), but are providers thinking through whether it is appropriate for the student? Some courses we’ve seen seem clearly inappropriate for online learning – courses that require practical exercises like nail technology.  Of course a student is going to end up feeling isolated! Many students will need the additional support of a face-to-face teacher to aid learning, for example those who need technical instruction and language support.

The bulk of the complaints were from people who felt they had been cajoled into signing up to expensive courses they didn’t really want, and which was often inappropriate for their literacy level or employment needs. Lured by the offer of free laptops, iPads and the dream of a smooth pathway to secure employment, they were signed up, or up-sold, in the tens of thousands.

The enrolment processes they described had very little focus on their career aspirations and educational needs.   The enrolment process were in reality a sales process, and was generally the only contact the client had with the college.

Likewise, these clients could not be described as students. They were job seekers, the long-term unemployed, people with disabilities, mental illnesses and addictions.  Many Aboriginal communities were targeted. Groups suffering enormous disadvantage made worse following this contact from a college or an education broker acting on their behalf.

This is Benjamin.  He’s in his early 20s, and lives in Warrnambool, in Victoria’s south west.  It’s got one of the state’s highest rates of youth unemployment. Over 2 years, he lodged 300 job applications, but nothing was leading to stable work.  Last year, in September, he got a call from a “careers coach” from Acquire Learning. The “coach” said he’d read his resume.  Benjamin thought he was about to get a job offer. But instead the “coach” said he was eligible for a government funded diploma of logistics.  Benjamin thought he must have passed some sort of test to be offered this opportunity.  He filled in the online forms for a diploma of logistics through the Australian Institute of Management, one of Acquire Learning’s providers.  It was a nine month course, and it cost more than $20,000.  (I’m advised that a similar course at TAFE can cost as little as $550 for a concession card holder.)

Benjamin then tried to withdraw, which he was entitled to do before the census date.  However when he called, he could only get a recorded message that said “Welcome to Acquire Learning” and then automatically hung up.  Fortunately for Benjamin, he contact our centre, and we helped him to withdraw before the five week cooling off period was up. 

Many others haven’t been so fortunate, and are saddled with VET FEE HELP debts.

Sarah (not her real name) was also applying online for jobs through a job ad site operated by Acquire Learning. A representative contacted her, and offered to enrol her in a Diploma of Management. Sarah didn’t even start the course, but later received notification that she was now liable for a VET FEE-HELP debt of over $23,000.

These colleges cast the net as wide as possible. Even I couldn’t stop the unsolicited emails coming. (I’m still getting them, by  the way. They seem to be very effective at bypassing my email junk mail trapper!)

From 2012 onwards, and in particular between 2013 and 2015, the enrolment practices carried out by some of Australia’s biggest for-profit providers of VET FEE-HELP courses were exploitative in the extreme.

Australia’s economy is in transition. The big car makers will be gone in a few short years, and people are going to need to be re-skilled for the jobs of the future.

This is where you come in – but this sector now has a trust deficit that needs to be tackled to restore public confidence in vocational education.

Providing vocational education and training is a service that, done well, will assist all Australians to participate in our economy and gain meaningful work. This responsibility you as educators have accepted is a significant one.

Education is not just another product to sell, and using aggressive sales tactics targeting lower socio-economic areas with door-knocking campaigns, and calling desperate job seekers with false promises of employment, has to stop.

The harvesting and selling of job-seeker’s details is still happening. We recently we received a call from the mother of a 16 year-old boy who had been enrolled over the phone to a VET FEE-HELP loan. And he didn’t conceal his age to the salesperson. It seems the sales contact was made because he uploaded his resume to a job search site hoping for a part-time job for the weekends.

When there are people employed in your sector that are paid on the basis of their ability to sell a course, the needs of the student will always come last. The incentive that drives this misconduct is built into the remuneration.

So what’s the solution?

You could start by banning all unsolicited sales from your sector. Kick out the brokers that have jumped from product to product, enriching themselves with pushy and unfair sales tactics. An easy sale isn’t necessarily a good sale.

You might think that sounds extreme.  It’s not. Our legal practice has seen these door-knockers float from education software and utilities to solar panels and now education courses. Your courses are being sold, not bought.  That’s no way to start the adult education journey.

We want the taxpayers’ money that was siphoned out by the massive mis-selling scandal to be paid back. Why should disadvantaged Australians be left with a VET FEE-HELP debt they should never have incurred, while private businesses reap the profits? ACPET and its members can do much to repair the trust by investigating every incomplete course and find out why it wasn’t started or finished. These courses costs anywhere up to $25k – if the person you or your broker enrolled didn’t even attempt to log-on, don’t you think, knowing what we now know about what’s been happening at the sales end, that you have a moral obligation to investigate why?

We also query the pricing for courses.  They should be reasonable and competitive, and we’ve heard some views on that subject earlier today. Your customers, if you want to call them that, aren’t necessarily shopping around.  They are not engaged in a commercial process – signing up to further education is not the same as buying a new pair of trainers.

And finally, this sector can do much to repair its reputation and trust by establishing a Vocational Education Ombudsman. An independent, industry-funded body that will resolve disputes between you and your customers for when things go wrong. Financial services, including banks, telecommunications and energy providers have one, they pay for it, and it’s free for consumers to use.  You should too.

The Government is using strong language about VET FEE-HELP. Their most recent discussion paper suggests there are tougher regulations to come, and the Minister reinforced that this morning.

We understand that delivery of education is a legitimate business, but it must be possible to deliver good student outcomes AND make a reasonable return.

That’s why we encourage this sector to go above and beyond current Government reforms.  Positive action is critical to rebuild confidence in the vocational education sector, to put student outcomes at the top of the priority list.

So you can wait for Government to decide for you, or get on the front foot, and make your sector better, fairer and more ethical for all those you seek to help to get ahead.

Thanks for listening, and feel free to come and tell me why everything I’ve said today is wrong!!

END