The Australian Competition and Consumer Commission (ACCC) has launched court proceedings against a second private training college, saying there are clearly problems with the Federal Government's billion-dollar VET FEE-HELP system.

The ACCC will take Phoenix Institute of Australia to the Federal Court, alleging misleading and deceptive behaviour.

Phoenix Institute reaped more than $100 million in government funding between January and October 2015.

It signed up more than 9,000 students in 17,000 courses in New South Wales, Victoria, Queensland, the Northern Territory and Western Australia.

Chairman Rod Sims said the ACCC would allege Phoenix Institute targeted some of the most vulnerable people in the country, falsely telling them the courses were free and they would receive a free laptop.

"People sometimes with intellectual disabilities, sometimes people who couldn't use a computer, but the courses were all online. Not surprisingly the commencement rates were very low," Mr Sims said.

The ACCC will ask the court to recover the $100 million in government funding.

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Program plagued with problems: ACCC chairman

Under the VET FEE-HELP system, students incur a debt for courses, which can cost as much as $30,000, but do not repay it until they earn more than $54,000.

Last month, the ACCC launched similar proceedings against private training college Unique International College Pty Ltd.

The consumer watchdog will ask the court to order the return of $57 million in government funding that company received.

"I think it is impossible not to conclude there are problems with the program," Mr Sims said, in his strongest comments yet relating to the troubled VET FEE-HELP system.

"For a program to allow this to be occurring is a problem ... it's often very hard to close the door after the horse has bolted, I know the Commonwealth is now aware of it."

Mr Sims said he expected to take at least one, if not two, further private training providers to court before Christmas.

Phoenix Institute is run by listed company Australian Careers Network (ACN).

ACN today notified the share market that regulatory watchdog the Australian Skills Quality Authority (ASQA) was seeking to cancel registration of Phoenix Institute, a move the company would fight.

Phoenix Institute has released a statement saying some of the ACCC's allegations "appear to be made in the absence of information".

"The release states that 'not surprisingly, course commencement rates were extremely low'. Phoenix is unable to comprehend how the ACCC has come to that conclusion as the information in relation to commencements is unavailable outside of Phoenix management and has not been requested nore provided," Phoenix's statement said.

"Phoenix can only believe the comment is made in error and not in a vindictive manner."

The ABC has sought comment from Vocational Training Minister Luke Hartsuyker.