ACCC accepts Ray White Real Estate administrative undertakings

The Australian Competition and Consumer Commission has accepted administrative undertakings from Ray White (Real Estate) Pty Ltd and one of its agencies following allegations of misleading and deceptive advertising.

Ray White (Real Estate) Pty Ltd is the master franchisor of the Ray White network in Queensland.

Following a complaint about the advertising and auction of three properties in Brisbane's northern suburbs in late 2003, the ACCC expressed concern that the properties were promoted using indicative prices significantly below the prices at which they were passed at auction. The ACCC believed the action placed the agency at risk of breaching the misleading and deceptive conduct provisions of the Trade Practices Act 1974, in particular, sections 52, 53(e) and 53A*.  

Ray White Pty Ltd and its agent acknowledged that the actions may have raised implications under the misleading or deceptive conduct provisions of the Act and offered administrative undertakings to address the ACCC's concerns and to ensure future property advertising by the entire Queensland Ray White network comply with the Act.

As part of its administrative undertakings, Ray White Pty Ltd and its agent have agreed to:

• refrain from engaging in the conduct in question, including 'indicative pricing' or 'bait pricing' when advertising properties in the future
• bring to the attention of all Queensland Ray White franchisees the details of the conduct in question and the concerns of the ACCC
• conduct training sessions on a regular basis for Ray White's office principals and salespeople which contain elements pertaining to trade practices compliance, to update Ray White's materials, content and methodology with the specific provisions of the Act pertaining to 'indicative pricing', in particular sections 52, 53(e) and 53A and to convene a specifically designed training program
• amend manuals to include specific references to the relevant sections of the Act
• issue a formal policy that all of its offices must comply with the specific provisions of the Act as they relate to 'indicative pricing'.

ACCC Chairman, Mr Graeme Samuel, said the administrative undertakings are an effective and positive resolution to this matter and the high level of cooperation provided by Ray White Pty Ltd and its agent should also be acknowledged.

"The undertakings are particularly beneficial as they seek to ensure compliance by the entire Queensland Ray White network.

"Ray White's recognition that its agent's actions in this instance may raise implications under the Act should alert other real estate companies that it is in their commercial interests to ensure that advertising practices comply with the Act", Mr Samuel said.

*Section 52 prohibits a corporation from engaging in conduct which is misleading or deceptive, or which is likely to mislead or deceive. Section 53(e) prohibits a corporation from making false or misleading representations with respect to the price of goods or services. Section 53A prohibits a corporation from making false or misleading representations in relation to the sale of land.