Matter 2: Complaints from students and regulatory agencies
230 Empower's Complaints Register records 34 complaints relating to the conduct of its recruiters (including two complaints that the student had not received his or her laptop), made between 5 September 2014 and 15 June 2015. The complaints involved serious allegations including, for example, that an agent had promised the student completion of the first stage of their course without doing anything.
231 In August 2014, Empower received enrolment cancellation requests from three students, recruited by Qualify Me, who variously said they were misinformed about the course. There is no evidence that these requests came to the attention of any of Mr Yang, Dr Heaney or Mr Fakhouri.
232 On 5 September 2014, there was a complaint that an agent "declared they were representing the Government offering funded courses". Empower's Complaints Register shows that this complaint came to the attention of Mr Devine.
233 Although the evidence did not explain how, by mid-October 2014, Mr Fakhouri and Mr Ohunayo were aware that there had been complaints from students which required them to exercise greater control over the conduct of Empower's recruiters. In an email dated 17 October 2014, Mr Fakhouri recorded that there had been complaints that:
• Students are not aware of what VET FEE HELP is
• Students are not aware of what the course costs are
• Students are told to sign the VET FEE HELP form to receive a free laptop
• Student are not aware what course they have signed up for
• Student are told to come in at any time to receive a free laptop
234 Mr Fakhouri asked Mr Ohunayo to tell all agents that students would not be converted to "current student" and would not be allowed to pass the first census until Empower's team had verified, among other things, that the student understands "VET FEE HELP and Course costs".
235 In early November 2014, the DET sent Mr Yang a notice under cl 24 of Sch 1A to the HES Act dated 30 October 2014, arising from an allegation that persons representing Empower:
… have been targeting the indigenous population in a particular area, many of whom have little or no formal schooling and little chance of completing a high level vocational course, and signing them up for VET FEE-HELP assistance. Those recruited were given laptops and cash.
236 The notice sought information including details of the process Empower undertook to engage its students in signing the Commonwealth Assistance Form and students' understanding of their financial liability for the VET FEE-HELP income contingent loan.
237 By the DET's 30 October 2014 notice, referred to earlier, Mr Yang became aware of an allegation set out above. Internal Empower correspondence shows that Dr Heaney and Mr Fakhouri were also aware of the notice in November 2014 and were involved in preparing the response to the notice.
238 On 5 November 2014, there was a complaint that SR Aust had enrolled a woman into two colleges. On 13 November 2014, there was a complaint that an agent had been targeting a building in Telopea "saying it's a free government course and you don't have to pay the money back". Empower's Complaints Register shows that each of these complaints came to the attention of Mr Ohunayo.
239 According to Ms Chan, around the time she started with Empower on 3 November 2014, Dr Heaney told her about a complaint that at least 40 people were signed up in a regional Indigenous community in Coonamble. Ms Chan also learned that Empower had received complaints of people being offered $50 to sign up for a course; a complaint that Empower was enrolling people who were homeless into their courses; and a complaint that Empower was enrolling people who did not have access to the internet. Ms Chan also learned of a complaint that Empower agents were saying that the laptops provided by Empower were free. Ms Chan spoke about these complaints with Mr Fakhouri.
240 In November 2014, Mr Ohunayo sent an email to Mr Fakhouri concerning a student who claimed to have felt that the agent "coerced her into signing for the course". Mr Fakhouri asked Mr Ohunayo to cancel the student's enrolment.
241 Also in November 2014, Empower cancelled two students following a complaint that they had been enrolled through the "trickery" of a recruiter. Empower's records show that Mr Devine was informed of this complaint.
242 On 2 December 2014, Mr Ohunayo instructed the cancellation of a student who had made the following complaint (errors in original):
I am in no position to make any sort of payment as my only income is my disability pension from Centrelink. Also, please note that when your representative came out to my place to tell me about this course I was told the only fee which might apply is if my income exceeds $53,000.00 a year then I would have pay for the laptop which I did not received, so therefore I am sorry but don't expect me to pay for something that I did not actively took part in. Please do the needful also it would be good idea if you could advise your representatives to give out full information to customers when they visit them so this sort of problems can be avoided in the future.
243 On 4 December 2014, Dr Heaney was sent an email complaining about the circumstances of Consumer A's recruitment. The complaint suggested that Consumer A had been enrolled by another college but had received a Chromebook from Empower. Dr Heaney made inquiries and learned that Consumer A had been enrolled by SR Aust with Empower. Dr Heaney asked Mr Fakhouri to look at the complaint urgently, saying "We may have to cancel him or he will go off to the DET to complain?".
244 On 18 December 2014, a student requested to cancel his enrolment on the basis that the salesman who came to his door had deliberately led him to think that the Department of Education had sent him and that he was anxious about incurring a debt unwittingly. There is no evidence that the request came to the attention of any of Mr Yang, Dr Heaney, Mr Ohunayo or Mr Devine.
245 Ms Chan also gave evidence of two complaints that she received during her time at Empower, which ended on 16 December 2014. She conveyed both complaints to Mr Fakhouri and Mr Ohunayo. In one case, an apparently homeless and drug affected student came into Empower's office and said: "I was signed up by an agent at a refuge I was at. I was told that I'd be given $50 if I signed a friend up".
246 In the other case, a person called the Empower reception and said:
There was this guy named Sam who approached me on a train and signed me up for an Empower course after he told me I would not have to pay for the course because I'm unemployed.
247 As earlier noted, in January 2015, Empower conducted verification calls in relation to some students and discovered that a student was unable to speak English. Mr Fakhouri proposed to Mr Yang that this student's enrolment be cancelled.
248 On 13 February 2015, Mr Devine send Mr Yang, Dr Heaney and Mr Ohunayo an email concerning serious allegations against an agency called "Active Group". Mr Devine's email said, relevantly:
There have been a number of serious allegations against the agency which we have warned them for already and another serious situation today. As you know Benga and I have worked tirelessly to work with agents and their staff to reduce the number of complaints and we were getting results as complaints were down. Since Active Group has started we have been bombarded with complaints regarding their staff misleading people about Vet Fee Help.
Aside from this we now have evidence of multiple occasions (5 or more now) where their sales reps have created a new email address or sent the docusign email to themselves and filled out the Vet Fee Help form and student Declaration form without the student knowing anything about it. This is a clear case of attempted fraud and things like this can and will shut down the Empower Institute as the magnitude of this is very serious. The other concerning thing is that we have requested explanation of these actions and dismissal of the sales reps but it has been ignored by Towha meanwhile he is constantly pressuring Empower to enrol his students. It's as if he can do anything he pleases with no consequences. Another example of this behaviour is the fact that he was told his staff could not door knock which has also been ignored.
249 On 23 February 2015, Dr Heaney (with the knowledge of Mr Yang, Mr Ohunayo and Mr Devine) terminated Active Group's contract with Empower. The termination letter included the following:
You have received a warning on the 4th of February 2015 and since then, there have been several new cases against your agency of not only unethical behaviour but cases which can be considered criminal activity and government fraud.
250 By letter dated 4 March 2015 from ASQA, Dr Heaney was informed of 11 complaints received by ASQA. The complaints included the following, as summarised by the applicants' submissions:
(a) Empower or its agents had targeted and recruited people on the street and pubs in Coonamble and offering them free laptops and $50 cash to enrol, without telling those people about the VET FEE-HELP debt they would incur. The people recruited would not have had the capability to complete the course. (Complaints 1006239, 1006276, 1006578)
(b) People enrolled by Empower often did not have the capacity to complete a diploma qualification, and had limited language and computer skills. (Complaint 1006624) Empower targeted vulnerable people who will never complete the course and have no intention of studying. (Complaint 1006631)
(c) Empower's recruiters had been targeting public housing areas offering free laptops to people to enrol, including through door knocking. (Complaint 1006449) Empower's recruiters had door knocked people with "Do Not Knock" stickers on their door. (Complaint 1006663)
(d) Of the thousands of people enrolled, only a small percentage were actively studying, and Empower provided no English language support, and many students could not complete their courses. (Complaint 1006361)
(e) Empower's marketing was misleading and deceptive (Complaint 1006624)
(f) Empower's teaching materials did not meet standards, and there was a lack of evidence that its trainers were appropriately qualified. (Complaint 1006624)
251 Dr Heaney responded by letter dated 12 March 2015. Mr Yang was sent a copy of the response.
252 By email dated 31 March 2015, Mr Devine was informed of the complaint made by Ms Pumati, that she was enrolled behind her back.
253 The applicants relied on six instances of complaints about recruiters offering "free laptops" to consumers. The first instance (18 December 2014) is referred to above. I could not locate the second (16 January 2015), third (13 February 2015) or fourth instance (23 March 2015) in the evidence. The fifth instance (25 March 2015) is recorded in Empower's Complaints Register, but there is no evidence that Mr Yang, Dr Heaney or Mr Ohunayo were aware of it. The sixth instance (15 June 2015, involving three students) is recorded in the Register but there is no evidence that Mr Yang, Dr Heaney or Mr Ohunayo were aware of the instance.
254 The applicants relied on five instances of occasions on which recruiters allegedly made false or misleading representations, including that courses were free. The first instance (7 September 2014) is recorded in the Register but there is no evidence that Mr Yang, Dr Heaney or Mr Ohunayo were aware of it. The second instance (18 November 2014) is recorded in the Register and the Register indicates that it came to the attention of Mr Ohunayo. The third instance (16 January 2015) is recorded in the Register and in an email from Mr Fakhouri to Mr Yang, indicating it came to Mr Yang's attention. The relevant complaint was that the student was not told that "it would remain as debt if she didn't earn $5300 a year". The applicants did not point to evidence of the fourth instance (13 February 2015) or the fifth instance (14 May 2015) in the evidence.
255 The applicants relied on five instances of occasions on which recruiters were alleged not to have explained or adequately explained VET FEE-HELP. As to the first instance (received 7 October 2014), Empower's Complaints Register shows that it was disputed by the relevant agent and the student's enrolment was cancelled. The Register does not indicate that any of Mr Yang, Dr Heaney or Mr Ohunayo were aware of the instance. I was unable to locate the second instances in the evidence. The third instance (25 February 2015) was recorded in Empower's Complaints Register. It was reported by Dr Heaney. Although it is not entirely clear, the fourth instance (10 March 2015) was probably recorded in Empower's Complaints Register, which shows that it came to the attention of Mr Ohunayo. The sixth instance (15 June 2015, involving three students) is referred to in [236] above.