A virtual diploma institution has faced penalties of $30 million following the use of questionable methods to enroll vulnerable students in programs they never accessed.
Captain Cook College capitalized on modifications to student loan policies to enroll over 6000 students within just three months, which contributed significantly to achieving an operational profit of $19.5 million during the fiscal year 2016.
Justice Angus Stewart stated on Tuesday that the institution’s actions were considered a ‘scam,’ as they unfairly exploited thousands of students and misused public funds in an unethical manner.
He penalized the college $20.75 million and also imposed a $10 million fine on the parent company, Site Group.
The court determined that Site Group’s Chief Operating Officer, Blake Wills, was knowledgeable about and participated in the behavior.
Wills was instructed to pay $400,000 due to his role and was prohibited from overseeing corporations for a period of three years.
Over ninety-nine percent of the students failed to finish their online course, with approximately eighty-five percent of those not logging into the course at all.
“The institution’s egregious actions exploited the vulnerability of consumers and resulted in significant harm to thousands of students who were improperly enrolled, leading them to unknowingly accumulate considerable debt without gaining any benefits from their enrollment,” stated Justice Stewart.
The legal proceedings were initially initiated against the college by the Australian Competition and Consumer Commission in November 2018.
The regulatory body claimed there was definitive proof that the college admitted susceptible students into programs where they had little chance of finishing.
The courses encompassed business studies, project management, and human resources management.
More than $60 million in VET FEE-HELP loans were accumulated by the affected students, which is part of a governmental initiative designed to assist them with covering their tuition costs.
These debts were subsequently forgiven by the federal government.
The college’s behavior resulted in a financial impact of tens of millions of dollars for taxpayers, according to ACCC Chair Gina Cass-Gottlieb in a statement released on Tuesday.
She stated that it also caused distress among the numerous students registered in their programs, who for many years were informed that they owed substantial amounts to the government.
The Federal Court ruled that the college and Site were involved in a pattern of unconscionable behavior as stated in their 2021 ruling.
Captain Cook College, Site Group, and Mr Wills took their case to the High Court but found the rulings confirmed in August 2024.
The institution was founded in 1998 to offer online VET FEE-HELP diploma programs, and was subsequently acquired by Site.
In 2020, former college chief executive Ian Cook acknowledged his role in the misconduct.
He faced a ban from overseeing companies for three years, along with an obligation to pay $250,000 and contribute to legal expenses.
Site Group has been reached out to for their input.
