A thousand or so complaints from students disgruntled over Nova's refund policy hardly sounds alarming to me, especially if one considers that Nova reportedly has around a half-million students. But Nova's comparison of its refund policy to a major train operator's cancellation refund policy hardly sounds like a rational defense either. Unlike train service, the quality and consistency of English instructors and their lessons -- as perceived by students -- vary widely and are quite subjective.
Moreover, many conversation schools use their best or most popular teachers (which are not necessarily one and the same) to do the free demonstration lessons, so it's no surprise that a lot of students feel dissatisfied -- or even cheated -- when they pay for a long and very expensive course of lessons, but then receive lessons of lower perceived quality.
Conversation schools should be as honest and open as possible about the highly variable rates of satisfaction that students experience in their lessons, and they should all be legally required to provide very generous, pro-rated refund terms in the contracts with their students. Better assurances or guarantees of quality would help avoid student complaints about school practices. They would probably also improve the all-important sales figures.