An Adelaide real estate agency, Golden Way Realty, has agreed to offer a refund to customers who may have been misled over the agent's professional fee or commission, after Australian Competition and Consumer Commission intervention.
It was alleged that some of the sales agency agreements entered into by the firm had failed to clearly disclose to property vendors that Goods and Services Tax was applicable and would be charged in addition to the quoted fee.
The sales agency agreements related to property sales, and to professional fees collected, from July 2000.
The ACCC investigation found that five customers had been affected and $2,240 for GST payments was incorrectly claimed. Where such GST payments were in fact collected they were remitted to the Australian Taxation Office.
Golden Way Realty submitted that it had not intended to mislead or deceive its customers and that the conduct had resulted from it having been confused over GST related changes contained in the standard Real Estate Institute of South Australia sales agency agreement.
The ACCC accepted court enforceable undertakings that included refunding the GST liability to affected customers and implementing a trade practices law compliance training program for staff.
"The Trade Practices Act prohibits misleading or deceiving conduct", ACCC Chairman, Professor Allan Fels, said today. "All real estate agents must be aware that professional fees quoted to property vendors must be clearly disclosed as being GST-inclusive so there is no risk of consumers being misled. Consumers need to know their total liability prior to entering such contracts. Other property vendors who believe they may also have been misled in this manner should in the first instance raise the matter with the real estate agent concerned.
"The ACCC acknowledges that Golden Way Realty acted promptly to resolve the matter in this instance and welcomes these undertakings because they not only correct the situation but also institute a trade practices compliance program to ensure that future conduct is not at risk of contravening the Act".