This article is from the Australian Property Journal archive
THE record $18 million fine imposed on property spruiker Rick Otton, sole director of We Buy Houses, proves that urgent regulation of property investment advice is needed, according to the Property Investment Professionals of Australia.
PIPA chairman Peter Koulizos said the fine was a sign that the ACCC was serious about taking action against unscrupulous operators promising an unachievable level of financial success.
“Unfortunately, there remains far too many crooks working in our industry,” Koulizos said.
“That’s because there isn’t any property advice regulation, which creates a breeding ground for greed and bad behaviour, with the general public the ultimate victim.”
The Federal Court penalties imposed last week comprised of $12 million against We Buy Houses, and $6 million against Otton personally. They are respectively the highest ever imposed for breaches of the Australian Consumer Law by a corporation and an individual.
According to the ACCC, We Buy Houses and Otton taught real estate investment strategies via free seminars, and paid “boot camps” and mentoring programs that claimed people could buy a house for $1, without requiring a deposit, bank loan or real estate experience, or using little or none of their own money; and quit their jobs and create passive income streams through property.
Koulizos said property investment was a long-term wealth creation strategy, with most successful investors owning property for 20 years or more, so anyone promising short-term profits was a spruiker not an expert.
Australian Property Journal
