Productivity Partners Pty Ltd v Australian Competition and Consumer Commission; Wills v Australian Competition and Consumer Commission

Captain Cook College sold online vocational courses through the Commonwealth's VET FEE-HELP scheme. The Commonwealth paid the course fees to the college. The student then owed that amount, plus a 20 per cent loan fee, to the Commonwealth and would repay it through the tax system after earning above a threshold.

That structure meant the college could be paid even where a student did little study or gained no useful qualification. The enrolment process therefore needed controls that distinguished genuine, suitable students from people who did not understand the transaction or were unlikely to engage with the course.

From 7 September to 18 December 2015, the college changed its enrolment process by removing two system controls. Those controls had reduced known risks of unaware or unsuitable people remaining enrolled when the college became entitled to claim fees.

The problem was not a stray mistake by one salesperson. The business changed the system itself, then claimed and retained government revenue generated by the affected enrolments. The conduct continued against a background of information showing poor student engagement and serious problems with the model.

The High Court upheld the finding that the college's system of conduct was unconscionable under section 21 of the Australian Consumer Law. The statutory test required an evaluation of all the circumstances. It did not require proof that the college intended each harmful consequence to occur.

The Court also upheld liability for Mr Wills. A person accused of being knowingly concerned in a contravention must know the essential facts and intentionally participate. They do not also need to know the legal conclusion that those facts amount to unconscionable conduct. Mr Wills' involvement also supported liability for the parent company.

Conversion targets do not excuse a system that hides consequences or removes protections the business knows are necessary. A sensible review should compare the promise made at the top of the funnel with the commitment created at the end.

Look closely at customers who enrol but do not use the service, cancellation patterns, complaints, refund requests and staff warnings. Those signals may show that the journey is producing revenue without genuine customer understanding or value.