)
A Sydney real estate and wealth education provider has been ordered to pay $14.7 million in refunds to thousands of students over misleading representations, while the company will also have to pay a $5 million pecuniary penalty and its sole director Dominique Grubisa has been banned from managing companies for five years.
Grubisa, the sole director of Master Wealth Control which trades as DG Institute, has also been ordered to pay $1 million in penalties.
Grubisa was previously given a four-year ban by the corporate watchdog from engaging in credit activity in April 2022 due to false claims of holding an Australian Financial Services Licence (AFSL) and an Australian Credit Licence (ACL), but last year that was overturned by an appeals tribunal as her business does not actually provide credit.
While that ban was still in place, in December last year the the consumer regulator joined the pile-on against Grubisa and DG Institute by filing a separate case over how education programs were represented in their promotion, sale and delivery.
The Australian Competition and Consumer Commission (ACCC) called out the institute's claims to students around a so-called “impenetrable Vestey Trust” structure to protect assets from creditors, which the regulator found did not provide the level of protection that was promised by DG Institute.
Students of another course run by the institute were told they could assist distressed homeowners to sell their home and retain some of the equity, whereas such homeowners would lose any remaining equity if the property were repossessed by a mortgagee - a claim refuted by the ACCC as mortgagees are only entitled to amounts owed plus any reasonable costs of recovery.
In April this year the Federal Court ruled that both Grubisa and DG Institute had breached Consumer Law with two of its programs that were sold between April 2017 and November 2022.
The court found that Grubisa - who has described herself as a lawyer, author, property educator and asset protection specialist - was knowingly concerned in DG Institute’s contraventions through her role in making the statements on video in promotional materials and program materials, and in drafting, reviewing, editing and/or approving content for these materials.
The court also found that Grubisa knew that the representations she made about both programs were false and misleading.
Grubisa has been banned from managing corporations for five years for being knowingly concerned in the contraventions by DG Institute.
The court's redress orders require DG Institute to refund consumers an amount equivalent to the course fees paid by more than 2,100 students who enrolled in the MWC program between April 2017 and November 2022.
These orders underscore the importance for businesses and company directors to ensure statements made to consumers promoting their products and services are accurate and not misleading,” ACCC Commissioner Liza Carver said.
“The substantial consumer redress orders, the penalties imposed and the five year disqualification order against Ms Grubisa reflect the serious nature of the conduct, and clearly demonstrate the consequences of making false claims when promoting goods or services to consumers.”
DG Institute is required to contact consumers who may be eligible for redress and to post information about the redress scheme on its website and Facebook pages.
The court also ordered injunctions restraining DG Institute and its officers, and Grubisa, from making similar or the same representations for a period of five years.
The court also ordered DG Institute and Ms Grubisa to pay the ACCC costs of the proceedings.
)
