A federal government back-to-work scheme is supplying workers to a company that sells expensive diplomas to the unemployed.

The Department of Employment and the national vocational education regulator are investigating allegations raised by whistleblower Liam Hyland, who was employed as a "careers counsellor" at a Melbourne education broker.

It is the latest scandal to plague Australia's multibillion-dollar vocational education sales industry, which has been accused of signing up vulnerable people to courses they may never complete.

Mr Hyland's jobactive provider, Direct Recruitment - which has a contract with the federal government to deliver employment services in Melbourne - recently found him a job at Go Careers, which sells diplomas for private colleges including Careers Australia.

"I was told I was going to be a careers counsellor, but when I got there I realised it was a call centre," he said. "There were 20 people with headsets packed into a small office selling diplomas.

"We were selling diplomas to people that I believe had responded to fake jobs advertising ... they were all quite vulnerable people; they were people that were looking for work."

Mr Hyland said he had a target of selling one diploma a day, and talking to prospective students for three hours.

The social worker easily met his "talk time target", but failed when it came to selling diplomas.

"I felt that ethically I wasn't able to do that," he said. "I felt it was taking advantage of people to try and push them into a diploma that costs upwards of $20,000 in a 20-minute phone call."

He said he could not turn down the job offer or quit because his Centrelink payments could be cut off. He was fired after a week.

A sales script purporting to be from Go Careers, which a source provided to The Age, prompts employees to ask "prospects" whether they want to "upskill" to maximise their chances of employment.

"Make sure you relate it back to their experience and/or their dream career," the document reads.

Script for education broker Go Careers.

It advised employees to "think outside the box" when matching prospective students to diplomas. A logistics diploma will suit someone who is "very good with attention to detail".

Prospective students do not have to repay the VET FEE-HELP loan - a HECS-style loan for for-profit training colleges - until they earn more than $54,000 a year.

"If they are adamant for the cost, tell them that diploma courses are less than degree courses in cost but have similar reputation for being a wholesome course," the script reads. "It is recognised Australia-wide, and highly regarded by employers."

Employees were also given instructions to help job prospective students find their tax file number on their online Centrelink account.

To apply for VET FEE-HELP, students must provide their tax file numbers.

The loans scheme has blown out by 150 per cent over the past year to almost $2 billion, with the government launching a crackdown to stamp out rogue operators.

Go Careers managing director Jake Foster said his company did not engage in aggressive marketing techniques. He said he could not verify the documents provided to The Age because it was Sunday.

He denied that Mr Hyland had a sales target, saying he had not completed his training.

"We are market leaders in supporting our students and we comply with all relevant Australian consumer law and the ACPET code of conduct," he said.

He said a small proportion of his employees came via jobactive providers. 

The Go Careers script.

A Department of Employment spokeswoman said jobactive providers received federal government payments when job seekers remained in employment for four, 12 and 26 weeks, and met other requirements.

She said the department would investigate the allegations. The Australian Skills Quality Authority also confirmed it was looking into a complaint about Go Careers.

A Direct Recruitment spokeswoman said Go Careers had contacted them two weeks ago, and two workers had secured jobs.

"We are aware that the career advisers are performing outbound call centre duties as part of their role, but are not aware of the specific nature of these calls."

Consumer Action Law Centre chief executive Gerard Brody said a "honeypot mentality" pervaded the sector.

"These salespeople are driven by commissions; they are not independent and not providing them with independent advice," he said.

henrietta.cook@fairfaxmedia.com.au