Introduction
1 In this proceeding the applicant, the Australian Competition and Consumer Commission (ACCC), alleges that in the period 3 July 2014 to 24 March 2015 (the relevant period) the respondent, Acquire Learning & Careers Pty Ltd (Acquire), engaged in misleading or deceptive conduct, made false or misleading representations, engaged in unconscionable conduct and contravened provisions relating to unsolicited consumer agreements, in breach of the Australian Consumer Law (ACL) in Schedule 2 to the Competition and Consumer Act 2010 (Cth) (CCA). Acquire admits the contraventions and the underlying conduct by way of a Statement of Agreed Facts and Admissions (the agreed facts and admissions) and the parties have provided joint submissions on relief.
2 In the relevant period Acquire employed sales staff, misleadingly called Career Advisers, to use personal information that Acquire had purchased to make unsolicited marketing calls to job seekers and aggressively market vocational education courses to them. The courses were run by education providers who had agreed to pay Acquire a fee for referrals and enrolments, sometimes a percentage of the course fee. Acquire aimed to enrol the job seekers, on the spot, into a vocational education course (often into a management course which was plainly inappropriate) and also into a Commonwealth Government education loan scheme to pay for the course (the VET FEE-HELP scheme). It used various unfair and misleading sales techniques to induce job seekers. The enrolled job seekers incurred an interest-earning debt to the Commonwealth under the VET FEE-HELP scheme of between $9,900 and $21,000, repayable if the person reached a minimum income level. If the job seeker never reaches the minimum income level the Commonwealth is not repaid the loan.
3 Acquire only admits contravening conduct in relation to telemarketing calls it made to eight unemployed job seekers (the Job Applicants), but it admits that the contravening conduct was not that of rogue employees and was a core part of its business model. It accepts that its sales system courted the risk of contravening the ACL. I infer that these eight instances were not isolated examples. Acquire admits that it used undue pressure, unfair sales tactics, made false and misleading representations, did not provide an opportunity for the Job Applicants to consider the suitability of the courses being offered, did not disclose the circumstances in which the Job Applicants would incur a significant debt to the Commonwealth, and did not provide prescribed information about the enrolment agreement to the Job Applicants.
4 In some instances there were grave aggravating features to Acquire's unconscionable conduct. Some Job Applicants disclosed that they had a learning disability including difficulty reading, mental illness, an inability to complete other education courses, or had only completed school to year seven or ten. One Job Applicant had difficulty understanding and speaking English. Notwithstanding this Acquire induced them to enrol on the spot in a course which they were unlikely to be able to complete and/or which was unlikely to assist them to obtain better employment than if they had not enrolled.
5 Acquire admits that its conduct was unfair, misleading and unconscionable. It admits that it misled the Job Applicants by falsely representing that the primary or only purpose of the telephone call was for Acquire to find employment for them, that it had an employment opportunity for them, and in the case of some Job Applicants that he or she had been "chosen" for the offer. It admits that it had no reasonable grounds for representing to the Job Applicants that by enrolling in the course they would find employment or would find employment in a job that would pay significantly more than if they did not enrol. In most instances the Job Applicants incurred a significant debt to the Commonwealth for no real benefit, and it is likely the Commonwealth suffered a significant loss because the debt was unlikely to be repaid.
6 I consider Acquire's motive was not, as it pretended, to help job seekers out of the unemployment queue and into employment, but to maximise its profits through fees it received from course providers. Its activities resembled those of an unscrupulous fly by night operation rather than those of a prominent and market leading provider of student recruitment services, as it describes itself. In my opinion Acquire took advantage of vulnerable unemployed job seekers in order to rort the VET FEE-HELP scheme and its conduct was disgraceful. Ultimately, Acquire received significant fees and the burden of its conduct was most likely shared between such job seekers and the Australian taxpayer.
7 As the parties submitted, it is appropriate to make declarations that Acquire :
(a) engaged in misleading or deceptive conduct in contravention of s 18 of the ACL;
(b) made false or misleading representations about the uses or benefits of enrolling in a VET FEE-HELP assisted course in contravention of s 29(1)(g) of the ACL;
(c) engaged in conduct in trade or commerce which was liable to mislead as to the nature and the characteristics of the service provided by Acquire in contravention of s 34 of the ACL;
(d) engaged in conduct in contravention of s 76 of the ACL and reg 84 of the Competition and Consumer Regulations 2010 (Regulations) by failing to provide the Job Applicants with prescribed information relating to unsolicited consumer agreements; and
(e) engaged in conduct which was in all the circumstances unconscionable in contravention of s 21 of the ACL.
8 It is also appropriate to order injunctions against the repetition of such conduct, to require Acquire to pay pecuniary penalties totalling $4.5 million and to pay $100,000 towards the ACCC's costs. I gave close consideration to ordering a higher penalty but, particularly in light of the fact that Acquire is now in a parlous financial position, a penalty of $4.5 million meets the central aims of specific and general deterrence.