The practice of IT course overpricing involves some training companies partnering up with high street banks and getting them to finance their victims, sorry their students courses.
The student must then pay the bank back generally in monthly payments until the whole amount is paid off. The training company gets paid up front for the course from the bank and it's a win, win, win situation for them.
So to try to squeeze as much money out as possible from of their victims, these unscrupulous training companies, will overprice their courses. Courses which in my opinion are worth a few hundred, are sold for thousands. The profit margins for the training companies are huge and the risks to them are virtually non-existent as they make their money upfront from the bank paying them.
The poor student ends up paying over the odds for training and not only has to worry about completing the course but how to pay for it.
When payments are broken down into monthly payments, they are done to make the person buying the course believe it's a small price to pay for the course and ultimately success. A seemingly more manageable monthly payment looks better at least than a large payment upfront.
The way these training companies operate is similar to the auto trade, where when you visit a showroom to buy a car, the sales people are always trying to sell a car on finance. As they know there's less chance of manoeuvrability for the buyer and it will look like such a small price to pay, at least on a monthly basis for a car.
The sales people are only interested in one thing, to make as much commission as possible. To end up retaining a higher commission on the sale, selling the car through a finance deal is a great option for them. Compared to a cash buyer who could try to negotiate a hefty discount or maybe put off by the price, selling on finance makes it so much easier.
With finance deals, there are limited opportunities to cancel the deal and walk away, other than a rather limited cooling off period. If the student realises the course isn't what it's all cracked up to be, then there's very little recourse for them, especially if any limiting cooling off periods for the finance have expired.
As the debt is with the bank and not the training company, who've been paid upfront, trying to get a refund from a bank, is like trying to get blood out of a stone. The debt must be honoured by the monthly payments been made each month, irrespective of whether the course that's been bought is rubbish.
I've heard many sad stories where people have signed up for costly courses which have not been what they expected and when they've tried to get out of paying for the course, they've had little chance of stopping paying the monthly payments, as the finance deal is with the bank and not the training company.
It's no different to buying a car on finance, if the car turns out to be a lemon, that is, not worth the money paid for it, then there's very little chance in stopping the finance payments or returning the car and getting finance agreement cancelled.