A regulator warns property investors to be cautious of investment schemes, citing a string of recent legal actions against property promoters.
The NSW Department of Fair Trading this week issued a warning over property investment schemes, stating that regulators are putting ‘property spruikers’ on notice.
NSW Fair Trading Commissioner Rod Stowe said so-called ‘property promoters’ need to be aware of the financial and legal penalties they can face if they disregard consumer rights.
“We are sending the message to the industry that they have to act fairly with consumers or face action by consumer law regulators using the Australian Consumer Law,” Mr Stowe said.
He said that one of the most common tactics used by unlawful property spruikers was to mislead consumers about the benefits of an investment.
“Regulators across Australia have initiated court action to stop promoters who promise financial benefits they cannot deliver, 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.”
According to the department, 10 entities and their associates faced legal action following investigations by consumer law regulators between 2013 and 2015.
These cases involved:
• 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 in 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)
Fair Trading urged prospective investors to conduct their own research and seek independent financial and legal advice before engaging in any transactions with property scheme promoters.