Roused Regulator Re-Rattles Realtor’s Cage
[Author – Tim ODwyer]
Last year in Property Review Australian Competition and Consumer Commission chairman Graeme Samuel argued that, when a complaint was made, the role of the ACCC was not to determine whether the Trade Practices Act had been breached. While the ACCC would make “its assessment of the matter before it”, he explained, the ACCC’s primary role was to “enforce the Act and to educate the Australian public about the Act.
Mr. Samuel was responding to an earlier article of mine. This had detailed the initial reluctance of the ACCC’s Brisbane office to investigate a serious complaint about certain pre-auction advertising by a number of agencies belonging to a major real estate group. This suspect advertising ran in major Queensland newspapers after the group had previously given the ACCC an undertaking to tell its state-wide network of agencies to comply with the TPA. The group also undertook to the ACCC, which had investigated an earlier complaint by the same complainant about one group agency’s pre-auction advertising, to conduct TPA compliance training sessions and amend its training manuals. The ACCC had at that time gone through the group like a dose of salts. (See ACCC report on that matter)
In due course the ACCC’s Brisbane office did make “its assessment of the (new) matter before it,” and considered several supplied pages of group agencies’ advertisements which appeared in The Courier Mail and the Gold Coast Bulletin. It considered also one group agency’s marketing letter. The ACCC identified pre-auction advertisements for three Brisbane properties which were of “possible concern”. These used price representations similar to those in the marketing letter. The ACCC then wrote to the group’s head office “seeking information in relation to the advertisements of the three Brisbane properties.” A director of the group responded with information which apparently enabled the ACCC to assess the advertisements in terms of the TPA and the group’s undertakings.
Based on the reserve and sales price information provided, the ACCC believed the advertised price representations were not likely to breach the Act or the undertakings. It turned out, in fact, that the advertised prices closely approximated the reserve and subsequent sales prices. Accordingly the ACCC later informed its complainant: “This office does not intend to further pursue its enquiries in relation to the advertisements in the subject newspapers at this time.”
Similarly the ACCC was “of the view” that representations in the marketing letter did not breach the Act or the undertaking because they were not “intrinsically” misleading or deceptive.
The ACCC particularly mentioned that it would not make further enquiries about a property advertised at “$8mil+” after the group agency in question advised the ACCC that property had been sold, but the vendors did not wish to disclose the sale price. Has an insight has now been gained into the stringency of the Big Regulator’s investigation of real estate agencies? “Trust us,” the agency probably assured the ACCC, “we’re up-market realtors.”
Still, because of the ACCC’s pointed inquiries, the real estate group’s Chief Executive Officer wrote to all Queensland offices to again reinforce the “expectation that they will comply with the Act.” The ACCC had clearly reminded the group of its undertakings, and emphasized that it was expected to use “all reasonable efforts to ensure that its franchisees comply with their obligations under the Act.”
Finally the complainant was thanked for bringing this matter to the attention of the ACCC which assured him that it was “keen to ensure” the group continued to comply with its undertakings. Moreover the ACCC would happily “consider any further concerns” the complainant (and presumably anyone else) might have about “specific property advertisements”.
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