Sydney Christian group Mercy Ministries has been referred to the Australian Competition and Consumer Commission (ACCC) over allegations it misled mentally ill women seeking help.
On its website, the group claims to treat women aged 16 to 28 by "providing homes and care for young women suffering the effects of eating disorders, self harm, abuse, depression, unplanned pregnancies and other life-controlling issues".
Its website says women's Centrelink payments are used to cover their accommodation if they do not have a sponsor to support them.
But the Democrats allege Mercy Ministries has misled troubled young women into thinking they would receive free help.
They have asked the Federal Government to take the matter to the ACCC.
Mercy Ministries is linked to the Hillsong Church and receives a large portion of its funding from the Gloria Jean's coffee chain.
Three former patients recently alleged its programs involved "emotionally cruel and medically unproven techniques", such as exorcisms and "separation contracts" between friends.
The girls said they left the Mercy centre suicidal after being told they were possessed by demons.
