Released 25/07/2017
Consumer regulators around Australia have launched a national campaign aimed at making people wary about dealing with property spruikers who claim to be ‘wealth creators’.
“While there are legitimate companies that offer credible property investment opportunities, there are a number of rogue operators who conduct “free” seminars and apply high pressure sales tactics to get people to sign up on the spot without giving them an opportunity to seek proper advice,” said Minister for Justice and Consumer Affairs, Shane Rattenbury.
“Some seminars involve catchy chants, expensive wine being given to a ‘lucky’ attendee, and all sorts of other gimmicky tricks to give people a false sense of being empowered.
“The spruikers create the impression they’re financial advisers who want to make you lots of money through property investment. They claim to offer safe deals where high returns are practically guaranteed.
“However, participants should get independent professional advice about realistic returns and the true legal and financial risks associated with the substantial investment they are considering before signing up.
“So we urge people who attend these seminars not to get caught up in the hype and end up making impulsive decisions they may regret later.
“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.”
Be wary if a seminar promoter:
- encourages you to buy an investment property that you can’t see or hasn’t even been built yet;
- plays down the risks and costs, and side-steps questions from the audience;
- seeks payment for more courses, books and DVDs to learn their ‘secrets’;
- offers you a loan so you can sign up for more investment courses; or
- makes you feel pressured into signing up on the day.
“In some cases, the deal involves a rent-to-buy scheme which is fraught with danger and targets people who are desperate to get into the housing market as well as people who are finding it difficult to sell their home,” Mr Rattenbury said.
“People who sign a rent-to-buy contract pay a deposit as well as a premium on top of their rent with the hope of purchasing the property at a later date, but all could be lost if they can’t get finance to complete the sale many years later.
“The seminars may also be a tactic for organisers to get people to buy expensive training material or courses. If the promotional material does not clearly state goods or services will be sold at a seminar, you may be eligible for a 10 business day cooling-off period under the Australian Consumer Law. This means you have the right to cancel any commitments made on the day without penalty for items valued at more than $100. This right may be extended to six months if you weren’t told about this cooling-off period.”
More information as well as videos are available at www.consumerlaw.gov.au/spruikers. Enquiries can be made by calling Access Canberra – Fair Trading – on 13 22 81 or by emailing fair.trading@act.gov.au. Consumers can also visit ASIC’s MoneySmart website which has advice on its investment seminars page.
- Statement ends -
Shane Rattenbury, MLA | Media Releases
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