Federal Court imposes record penalty on Phoenix Institute

31 July 2023

In Australian Competition and Consumer Commission v Phoenix Institute of Australia Pty Ltd (Subject to Deed of Company Arrangement) (No 3) [2023] FCA 859, the Federal Court imposed a record $438 million civil penalty on the Respondents for breaches of the Australian Consumer Law.

Phoenix was a provider of tertiary diploma courses. It promoted to consumers that its courses were free and that consumers would receive "free" laptops on enrolment. These representations were misleading or deceptive and the scheme, as a whole, was systemically unconscionable. On enrolment, consumers were incurring VET FEE-HELP scheme debts. The average debt was $37,000. The cumulative debts exceeded $350 million.

The Respondents' conduct included targeting consumers who were indigenous, disabled or who came from non-english speaking backgrounds. The Court described the conduct as "systemic unconscionability ... of the gravest kind."

Danielle Forrester appeared for the ACCC, led by Naomi Sharp SC.

Link to judgment.