https://youtu.be/hBKmtAaMPQQ
Consumers are being urged to be aware of property investment schemes promising big returns with low risks.
While there are companies in Australia offering credible property investment opportunities, a number of rogue operators apply high pressure sales tactics using ‘obligation free’ seminars to persuade people to sign up on the spot.
These operators, often referred to as ‘property spruikers’, are accepting generous commissions from developers while the consumer is left with a deal more likely to lose money than make it.
NSW Fair Trading Commissioner Rod Stowe explained that the consumer protection agency continues to receive complaints from those affected. “We have had numerous complaints from consumers who have signed up during these property investment or ‘wealth creation’ seminars and lost tens of thousands of dollars,” Mr Stowe said.
“Consumers are advised to take the time to obtain independent financial and legal advice before signing anything to help ensure that they are getting a good deal,” Mr Stowe said.
This video by News Corp reporter Annabel Hennessy reveals warns investors to by wary of persuasive tactics used by property investment spruikers. She spent months and documented her experience on the property investment seminar circuit. (Published by Consumer and Business Services with the permission of Australian Consumer Law.)
https://youtu.be/kp–zbCt01Y
National campaign ambassador and finance expert Paul Clitheroe warned against trusting unreliable testimonies promoting ‘get-rich-quick’ schemes, where the fallout may come years after the first investment.
“You wouldn’t get medical treatment from someone offering the same remedy to everyone in a room, so be wary of the property spruiker who sells the same ‘investment’ scheme to everyone at a seminar
“Basically, the spruikers are just in it for themselves and accept generous commissions once the deal is done. The investor is then left with what is probably a dud deal more likely to lose money than make it.”
Consumers are warned to be wary of any scheme offering the following:
- The spruiker supplying mortgage broking, conveyancing or tax advice as part of the property deal;
- The suggestion that the scheme is ‘government approved’ by frequent reference to the Australian Taxation Office or Australian Securities & Investments Commission;
- Spruikers offering personal loans or credit;
- Property investment strategies using current equity to borrow significant money;
- Claims of a capital growth rate that may not be independent or credible;
- Spruikers who side-step questions or downplay the risks and costs involved;
- The promotion of a particular property development, as the spruiker may be receiving a commission or have an undisclosed interest in it; or
- Buying properties interstate that you have not seen or off-the-plan properties that do not yet exist.
Complaints
Federal, state and territory consumer protection agencies take complaints about property spruikers. The state and territory agencies may also be able to conciliate a resolution:
- Consumer Affairs and Fair Trading (Tas)
- Consumer Affairs (NT)
- Consumer Affairs Victoria
- Consumer and Business Services (SA)
- Consumer Protection (WA)
- Fair Trading (ACT)
- Fair Trading (NSW)
- Fair Trading (Qld)
- Australian Competition and Consumer Commission
