Reading Between The Regulator’s Lines

[Author – Tim ODwyer]

When Graeme Samuel, Chairman of the Australian Competition and Consumer Commission addressed a gathering of Real Estate Institute of Victoria members two years ago, his speech soon drew flack. This came not only from Kareena Ballard, then President of the Real Estate Institute of Australia, in a letter published in the Financial Review, but also from consumer advocate Neil Jenman on his website

Neil Jenman picked up on Samuel’s assurance that the ACCC would “continue to keep a close eye on the property spruikers and take action to protect consumers.” In Jenman’s view this was merely tough talk while consumers continued to hand over millions of dollars to dozens of untouched, brazen and active spruikers promising to make mugs into millionaires. Jenman says spruikers’ claims of “quick riches” should draw “quick action” from “Sheriff Samuel”.

The REIA took issue with, among other things, Samuel’s assertion that “many in the real estate industry” were “ignorant of their responsibilities under the Trade Practices Act”, and that the industry “had only itself to blame” for its regulation under Federal and State laws designed to protect consumers. “The real estate industry is very aware of its responsibilities under the TPA”, Ballaed said. “The ACCC,” she explained, “continues to confuse real estate agents . with property developers and property investment spruikers .”. The REIA was keen, she boldly claimed, “to work with government” to ensure consumers were “protected appropriately”, but believed the ACCC had a “part to play” in educating and supporting agents “to understand the complex legal issues raised in the TPA.”

Neil Jenman picked up on Samuel’s assurance that the ACCC would “continue to keep a close eye on the property spruikers and take action to protect consumers.” In Jenman’s view this was merely tough talk while consumers continued to hand over millions of dollars to dozens of untouched, brazen and active spruikers promising to make mugs into millionaires. Jenman says spruikers’ claims of “quick riches” should draw “quick action” from “Sheriff Samuel”.

The Chief Regulator may have meant more than he said. Sheriff Samuel’s actual words are in quotation marks below, while my unchained commentary follows in brackets.

  • “It’s clear from complaints we receive at the ACCC, and in the recent survey by Choice magazine, that there is still a long way to go before the industry achieves best practice for its clients.” (A lot of you betray the enormous trust placed in you by clients and customers alike.)
  • “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 TPA and the role of the ACCC.” (We lay the blame for this ignorance squarely on real estate institutes and franchise groups.)
  • “In September last year the ACCC announced that we would be targeting misleading and deceptive behaviour in the property industry.” (We usually give a warning before we start shooting.)
  • “The ACCC has made it clear that real estate practices are a priority area and we have instituted proceedings against a real estate firm in Victoria.” (We warned your mob particularly, Enzo, before firing our first shot.)
  • “It appears agents don’t typically seek legal advice about their obligations under the TPA, and nor is the Act specifically covered in real estate agents’ training courses.” (Even corporate crooks, with no training courses, seek advice from their lawyers.)
  • “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.” (Your members were lead to believe that, because they’d successfully dodged the local consumer cops for so long, we Feds would stick to picking on oil companies and the like.)
  • “Unless it is fully disclosed both at the start of the auction and at the time of the bid, the ACCC considers all bidding on behalf of the vendor to be deceptive and misleading conduct.” (We still wonder about the commission, stamp duty and legal consequences if an auctioneer inadvertently accepts a vendor bid, and even with full disclosure, we question the need for vendor bids.)
  • “When I first made clear the ACCC’s view on dummy bidding, one prominent auctioneer accused me of undermining consumer confidence in the best auction system in the world. I was sorely tempted to send that person a photocopy of the page in the Oxford English Dictionary that defines honesty.” (Real estate auctions have been dishonest for yonks.)
  • “Every industry . must be sensitive to community expectations and standards.” (Agents have had it too good and too easy for too long because of too little action by too many insensitive governments.)
  • “While I strongly support moves by the States to clean up the auction process and outlaw dummy bids, the ACCC 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.” (We are not convinced all State regulators have the wit, will or resources to enforce their limited new laws.)
  • “In the case of dummy bidding, the ACCC used the media to bring about behavioural change on the part of this industry in a way that benefited consumers, and, we believe, estate agents whose reputation can only be enhanced by fair and ethical behaviour.” (I use the word ‘reputation’ loosely.)
  • “The TPA requires adequate and appropriate disclosure at all times of all relevant price information, so that prospective buyers in the general public can make informed pricing decisions.” (Read my lips, it’s called truth-in-selling, it’s the law.)
  • “You are no doubt aware that the ACCC instituted legal proceedings against a Victorian real estate agency in December last year, alleging that advertising for the sale of a property in Caulfield was misleading and deceptive.”(Sorry Enzo, someone finally complained.)
  • “An example mentioned in a Choice magazine survey involved a property allegedly being passed in at auction at a price $100,000 more than the prospective buyers had been quoted by the estate agent.”(Don’t think we’re not checking this one out.)
  • “How does an agent quote a price to a prospective buyer which he or she knows is substantially less than the vendor is prepared to accept? In the view of the ACCC such behaviour can’t be viewed as anything other than deceptive and misleading conduct.”(Such conduct results of course from indifference by REIs, a nobbled legal profession and regulatory slumber.)
  • “Already the ACCC has taken proceedings in Court against perhaps the highest profile property seminar operator, Henry Kaye and his National Investment Institute.”(Please don’t anyone ask me how long H.K. was on the loose.)
  • “We are also aware that as the heat has been turned up on the seminars, promoters are turning to other methods to continue to lure investors such as through spam, direct marketing, telemarketing and even door-to-door.”(We keep up-to-speed on the gurus’ methods by monitoring Neil Jenman’s website.)
  • “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.”(OK, we admit we blew it in failing to protect consumers being ripped off over the past 10 years by Queensland’s over-priced property marketeers.)
  • “I acknowledge, and thank the REIV for its support of the ACCC’s initiatives to crack down on the property investment scams.”(Did I just mislead and deceive?)
  • “The ACCC has recently launched a major campaign to bring to account those involved in the preparation and publication of advertising content, including advertising agencies and media outlets.”(Watch this regulatory vacuum, but don’t hold your breath.)
  • “I have written to newspaper publishers and broadcasting licensees to advise them of their obligations and to alert them to ACCC’s close scrutiny of these issues.”(See, Enzo, we’re not picking just on agents.)
  • “In addition to using the media, the ACCC distributes around 800,000 copies of publications each year, many of them targeted directly at specific businesses.”(We really hope they get read.)
  • “Our internet site also provides an easy source of information on virtually every aspect of the ACCC’s activities.”(We’d love to think agents and real estate consumers access it regularly.)
  • “We issue Court proceedings when we believe they will be effective in bringing about a quick result.”(OK, we failed to close the two-tier marketeering stable door with our belated and ill-fated Federal Court action against the Commonwealth Bank.)
  • “I’m pleased to say the real estate sector is working with the ACCC to better inform its members about the requirements of the Trade Practices Act . .”(Did I mislead and deceive again?)
  • “The ACCC’s real estate guide to Trade Practices issues, ‘Fair and Square’, one of the ACCC’s most popular publications was prepared in conjunction with the REIA.”(Of course, I wouldn’t need to be here if agents had taken any notice of it.)
  • “The ACCC has also provided the REIA with a list of the top issues of concern to the ACCC in the real estate sector.”(Our stick-it note said, ‘clean up your act or else’.)
  • “The REIA is working with the ACCC to develop guidelines on how to address these concerns.”(The stick-it note worked, right?)
  • “It is also my job to protect consumers against misleading and deceptive conduct.”(We hope the States all soon realise it’s their job too.)

(A version of this article originally appeared in Property Review)

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