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Ben Hamilton05/10/15 20:133 min read

What VET Fee Help Providers can learn from the Volkswagen Scandal


Training providers who genuinely engage in building trust with their customers are sure to see the rewards in positive word of mouth and high staff retention, and will enjoy good relations with regulators.

The recent Volkswagen emission scandal is an example of industrial-scale deception. Why does this matter to VET Fee-Help Providers in Australia, and how can businesses and registered training organisations ensure sustainability? Who are the real victims of scams? 

Sustainable businesses of today are built on trust


In our increasingly connected world,  scandals explode across social networks before hitting the mainstream media. After almost a century of building trust -- across customers, staff, and regulators -- the pressure of profits, deadlines and targets got the better of the Volks in Lower Saxony.

Here's what happened when one of world's most respected companies lost its way in a relentless pursuit of growth and profit:

  • The company is facing the loss of billions in vehicle recalls, class actions and fines
  • The CEO has stepped down and others are under criminal investigation
  • Share price is down 30%
  • Switzerland banned the sales of all VW group vehicles
  • 11 million vehicles worldwide for recall
  • The company’s reputation is in tatters and its very survival is in question

This scandal has a long way to go before we really know just how much damage has been done and what the final cost will be.

Not sure of next steps to take? Here are 3 Ways Training Organisations Can Leverage Trust To Grow Revenue and operational transparency.

One bad apple...

One Bad Apple

In VET Fee-Help news, the Vocational Educational Training (VET) sector has been facing its own VW crisis for similar reasons. A few unscrupulous VET Fee-Help provider agents have been peddling courses to misinformed, vulnerable victims in our community. Agents enticed prospective students with free iPads and the like at shopping malls; saddling them with debts they will never be able to repay, and a course they may never benefit from or even complete.

Such marketing activities did not go unnoticed by social and mainstream media, both of whom conducted their own exposés. The entire VET Industry is now at risk of being tarred with the same brush due to the unethical actions of a few rogue providers.  The new Minister for Education, Simon Birmingham MP has made it clear that this kind of behavior will not be tolerated with new VET Fee Help Guidelines recently announced:

  • Regulators have since banned the practice of inducements
  • Regulators may even cancel the registration of some providers
  • Reforms to be implemented from now till March 2016

Subscribe to our blog as we explore what these changes mean for RTOs in future posts.

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Corporations have the responsibility to bring benefits to society

After the Volkswagen scandal and the VET Fee Help scammer crackdown, the world has spoken:

"It's a new world, and Trust is the new economic currency."

It is clearly the responsibility of registered training organisations to promote their courses not on gimmicks, but on the merit of the course itself and the quality of the provider. Only then will the students, and our society at large, benefit from the provision of quality education services.

Key Takeaways

Providers who engage agents must ensure that their registered training organisation management arrangements don’t just merely meet the legislative requirements the agents should also subscribe to the values that the provider espouses.

Providers who engage in unethical practices in the hot pursuit of short term growth and profits could do well to learn a lesson at VW’s expense. Eventually, customers, staff, and regulators will learn the truth, and the perpetrators will be punished by the regulator and the court of public opinion. By then then however, the damage is done and its an uphill task of crisis management to rebuild and restore trust - if the business can survive long enough.

Conversely, providers who genuinely engage in building trust with their customers are sure to see the rewards in positive word of mouth, high staff retention, and enjoy good relations with regulators and regulatory compliance.

Whether we're dealing with diesel cars or education services, trust is a valuable commodity; the need for balance between profit and ethics is clearer than ever. Betrayed trust clearly results in significant financial and reputational losses.

How is the Volkswagen Emission Scandal relevant to your registered training organisation? Tell us in comments below!

Next: 3 Ways Registered Training Organisations Can Leverage Trust To Grow Revenue


Ben Hamilton

Ben is the CEO & Co-Founder of Wisenet. The self-professed Troubleshooter is passionate about human rights, education, and science and technology. Besides whipping up delicious meals that create food envy, Ben enjoys extracting real business value from new and disruptive technology, and his current work at Wisenet revolves around creating products and services that remove operational complexities. He is currently based in Singapore.