The nation’s consumer watchdog agencies are warning promoters of property investment schemes to operate legally or face sanctions.
Australian Consumer Law regulators from around Australia have worked together to examine the practices of a number of promoters, resulting in legal action against interstate entities.
Business Services and Consumers Minister Gail Gago said a common theme was consumers being misled about the financial benefits of buying into a particular scheme.
“Regulators across Australia have initiated court action to stop promoters who promise financial benefits they cannot deliver on or who fail to tell people about their cooling-off rights to get out of a service they were pressured into buying at a ‘free’ seminar,” she said.
Regulators closely examined the activities of traders between 2013 and 2015; 20 traders received legal notices requiring them to substantiate claims made in advertisements and at their seminars.
This prompted legal action against at least 10 entities and their associates:
- No Loan Home Pty Ltd trading as Perth’s Easyhomes WA, Filip Butkovic, Nikola Butkovic, Patricia Susilo, Bryan Susilo and Rowan Lines, led by Consumer Protection Western Australia;
- We Buy Houses Pty Ltd and its director Rick Otton, led by the Australian Competition and Consumer Commission as a result of a coordinated investigation with NSW Fair Trading;
- Benjamin David Chislett, Creative Property Australia Pty Ltd and Benny Bull Pty Ltd led by Consumer Affairs Victoria.
In addition, legally-enforceable undertakings were given to regulators by seven interstate traders (including Rick Otton and Dymphna Boholt) who promised they would modify their behaviour, including changing their advertising and to stop making misrepresentations.
A total of 67 education/warning letters were also issued.
“We are sending the message to the industry that it must act fairly with consumers or face action by consumer law regulators using Australian Consumer Law,” Ms Gago said.
“Failure to do so will render the promoter liable for civil and criminal penalties, in some instances up to $1.1 million for a corporation and $220,000 for an individual.”
Before buying an investment property from a property promoter, consumers should conduct their own research and always obtain independent financial and legal advice.