Captain Cook College found to have misled students, engaged in unconscionable conduct

The for-profit college signed up Sydney and Brisbane students who were unlikely to complete their courses, while collecting millions in government tuition loans.

Captain Cook Statue, Hyde Park, Sydney.

The Federal Court has found private higher education institution Captain Cook College engaged in unconscionable conduct and misled prospective students through enrolling them in courses they would likely never complete, pocketing millions in government tuition loans in the process.

The decision was reached on Friday, almost three years after the Australian Competition and Consumer Commission commenced proceedings against the college — which has campuses in Sydney and Brisbane — its CEO Ian Cook, and the former head of its parent company Blake Wills.

It was found that the college “implemented a system of unconscionable conduct” to boost its earnings from September 7 2015, when it removed consumer safeguards from its enrolment and withdrawal process under the former VET FEE-HELP program, which provided government loans for tuition costs on diploma-level courses.

For three months after the changes were made the college enrolled more than 7000 people in online business courses – some of whom were mentally disabled or illiterate – claiming around $50m from the federal government under the tuition loan program.

ACCC chair Rod Sims said many of these students were unsuitable for enrolment and would never benefit from the course.

“Over 90 per cent of the affected consumers did not complete any part of their online course, and about 86 per cent of them never even logged into their course,” he said.

“Captain Cook College engaged in egregious conduct that sought to maximise its profit at the expense of students who were left with a debt and at the expense of the Commonwealth, which made substantial payments under the VET FEE HELP scheme, which was funded by taxpayers.”

Chair of the Australian Competition and Consumer Commission Rod Sims. Picture by Sean Davey.

It was also found that the college breached the Australian Consumer Law in its dealings with five individual consumers “by engaging in unconscionable conduct, making false or misleading representations and failing to comply with the requirements for unsolicited consumer agreements.”

Its CEO Mr Cook admitted he was knowingly concerned as part of a settlement with the ACCC in 2020, leading to a three year ban from managing corporations and a $250,000 fine.

But the college’s parent company, the publicly traded Site Group, and its former CEO Mr Wills, were found to be “knowingly concerned” in the system of unconscionable conduct.

The Court will decide penalties and other orders in relation to Captain Cook College, Site Group and Mr Wills at a later date.

The debts of those eligible consumers enrolled at the college between January 1 2015 and January 31 2016 have been cancelled by the government as part of its VET FEE-HELP student redress measures, which has seen more than $2.8bn in debts re-credited to more than 150,000 students since 2016.