Disgraced education consultant Get Qualified Australia has been ordered to pay an $8 million penalty for “serious, extensive and deliberate” misconduct, one of the highest ever penalties awarded for breaches of Australian Consumer Law.
The Federal Court issued the penalty to the now defunct skills certification body on Wednesday, while its sole director Adam Wadi was ordered to pay an additional penalty of $500,000.
Justice Jonathan Beach described GQA’s conduct as “serious, extensive and deliberate,” stating that the education sector as a whole had been “infected by the parasitic practices of operators preying upon the vulnerable and the unwary.”
The result follows a series of Fairfax Media reports since September last year, detailing the company’s demise and the 5000-plus former students left without the qualifications they paid for, many to the tune of thousands of dollars.
GQA was an education consultant that assisted job seekers in obtaining recognition of prior learning in industries such as beauty, construction and business.
The Australian Competition and Consumer Commission instituted legal proceedings against GQA in September last year, after successfully bringing a freezing order against the company in response to a large number of consumer complaints.
On Wednesday the court declared GQA made false or misleading representations and engaged in unconscionable conduct, while imposing unfair contract terms.
It also declared the business had used uninvited sales phone calls to enter into unsolicited consumer agreements, failed to disclose the full terms of agreements and required payment within ten business days.
Mr Wadi was found to be knowingly concerned in the conduct, with the court ordering him to pay a $500,000 penalty, as well as disqualifying him from managing a corporation for seven years.
“Get Qualified Australia and Mr Wadi took advantage of vulnerable people trying to advance their career,” said ACCC Commissioner Sarah Court.
“Some examples of the illegal conduct included enrolling people into courses through misleading marketing and unfair sales tactics, not providing the service customers paid for, and refusing customers refunds despite GQA’s 100 per cent money-back guarantee promise.”
Justice Beach handed down his judgment in the proceedings against the education provider in June, when he highlighted significant incentives awarded to GQA sales staff, such as commissions, Plasma TVs, iPhones, MacBook Airs, and cash bonuses.
In his judgment, he argued the company’s sales tactic was to “enrol consumers without confirming that they had the required documents,” finding that Mr Wadi “expressed the preference to recruit sales managers who were not from the education industry but who had a solid sales record.”
Ms Court said the substantial penalties imposed reflected the “egregious conduct of both GQA and Mr Wadi.”
In March it was declared the company was “unable to pay its debts” and would be voluntarily wound-up, with Blair Pleash of insolvency firm Hall Chadwick appointed as the liquidator.
GQA did not defend the case at trial in March.
Mr Wadi has been contacted for comment, however in June he told Fairfax Media the judgment was “far from being fair.”
“The judge has judged the matter after hearing only the ACCC, as GQA was not able to make it to the court room due to the ACCC starving the company [of] its financial resources, which could have paid for our legal expenses, GQA would have defended itself if we got to the court room,” he said in a statement.
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