Non-genuine providers and bad-faith operators

Risk overview

The e-scan has identified an increased threat from non-genuine providers and bad-faith operators that do not demonstrate a genuine commitment and capability to deliver quality training and assessment, and engage in fraudulent, illicit or unethical activities. These elements damage the reputation of the sector and the integrity of VET. Serious and organised criminals operating through VET create unfair competition for legitimate VET businesses and industries, exploit vulnerable people, and increase pressure on the economy through undermining immigration systems, and enable unqualified people entry into critical roles putting themselves, workplaces and the community at risk.

Key points from research

1. Serious and organised crime groups may rely on a range of VET skills and qualifications to help conceal their activity and manage the profits of crime.
2. Non-genuine RTOs are potential access points to enable unqualified people entry into critical roles and defraud government funding through VET and other social service programs.
3. Individuals involved with RTOs whose registration is cancelled due to fraudulent or unethical practices may associate with legitimate RTOs or purchase another RTO and seek to continue their engagement in these activities.

Our regulatory response

We are focused on strengthening system integrity and protecting quality VET against bad-faith 
operators.

We are:

• detecting behaviours of providers or individuals in the VET system that are undertaking concerning or suspicious activity. Boosted by our VET tip-off line, we use monitoring activities, industry feedback, networked intelligence and inter-agency systems that allow information sharing for regulators and law enforcement agencies
• disrupting and deterring the fraudulent or illegal operations, including through: 
  • focus on Fit and Proper Person requirements and the quality of delivery by new market entrants including implementing restrictions that prevent RTOs from expanding their course offerings if they have been operating for less than 2 years
  • applying an automatic lapse of registration where an RTO has been dormant for 12 consecutive months
  • adapting the way we operate to ensure that we coordinate efforts with other agencies to achieve maximum effect against the most serious threats to integrity of VET.
• responding with increasing investigation and enforcement of sanctions to remove or suspend the registration of providers as well as and court actions against non-registered organisations that are operating illegitimately. We are applying expanded offence and civil penalty provisions to cover a broader range of false or misleading representations by RTOs about their operations, and increased maximum penalties for breaches of relevant offences or civil penalties under the NVETR Act – for example, issuing false qualifications
• educating providers about their responsibilities to manage risks in their operations such as ensuring that people they employ in management and operational positions are fit and proper. Good governance practices by the organisation can safeguard against improper or illegal conduct and prevent the RTO from being vulnerable to criminal activities.