The Australian Competition and Consumer Commission will continue to pursue misleading property scams regardless of the methods used to entice potential investors, ACCC Chairman, Mr Graeme Samuel, has warned in a speech to the Real Estate Institute of Victoria.
He was responding to claims that property seminars which made misleading promises about quick wealth had gone 'underground'.
"We are … aware that as the heat has been turned up on [misleading property] seminars, promoters are turning to other methods to continue to lure investors through spam, direct marketing, telemarketing and even door-to-door.
"Be assured that regardless of the method used, the ACCC will continue to keep a close eye on the property spruikers and take action to protect consumers".
Mr Samuel said that since it launched its campaign in the property area, the ACCC had received more than 300 complaints and inquiries into its InfoCentre about property seminars, two-tier/time-share property schemes, auctioneer bidding processes and general concerns about real estate representations.
"It's clear from those complaints, and very recent discussions we have had with the industry, that many in the real estate industry are ignorant of their responsibilities under the Trade Practices Act, and the role of the ACCC.
"This is of particular concern, as the Commission has made it clear that real estate practices are a priority area".
Mr Samuel said it appeared agents didn't typically seek legal advice about their obligations under the Trade Practices Act, and nor was the Act specifically covered in real estate agents' training courses.
"There also appears to be some confusion in the industry, particularly in Victoria, about the powers of the ACCC and whether this conflicts with state government consumer affairs agencies and their administration of specific real estate legislation".
Among the ACCC's concerns was dummy bidding, which the ACCC regarded as "completely unacceptable" and which was being outlawed in some States.
"I am aware of concerns in the industry about the proscriptive nature of the[se] new regulations, and suggestions that they may lead to anomalies such as the banning of otherwise perfectly legitimate practices.
"May I suggest that the industry has only itself to blame for these consequences. Every industry – regardless of whether they are real estate agent, phone companies or retail giants - must be sensitive to community expectations and standards.
"Any industry which fails to respond to legitimate community concerns cannot complain when governments, which are sensitive at all times to the electorate, then pick up the ball and run with it.
"I should point out that irrespective of the laws introduced in various states and territories, this will not in any way negate the provisions of the Trade Practices Act, nor undermine our ability to intervene when we believe there has been deceptive or misleading conduct.
"While I strongly support moves by the states to clean up the auction process and outlaw dummy bids, the Commission will stand firm on the need for open and transparent processes that are not likely to mislead, and take action to enforce this where necessary.
"Even if an agent believes their actions to be legal under state law, we can, and will act, when behaviour contravenes the Trade Practices Act".
Mr Samuel commented that concerns about under- and over-quoting continued to be brought to the ACCC.
"In the view of the ACCC such behaviour can’t be viewed as anything other than deceptive and misleading conduct", he said.
"The Trade Practices Act requires adequate and appropriate disclosure at all times of all relevant price information, so that prospective buyers and the general public can make informed pricing decisions.
"Advertising or quoting a property at a price significantly less than the agent's estimated selling price, the market valuation or the vendor's price indications constitutes a breach of the Trade Practices Act. The Act would also be breached if an agent over quotes the value of a property to a vendor in order to obtain the listing".