Dymphna Boholt gives undertakings after caught in examinations by regulator into property promotion investment schemes

Dymphna Boholt gives undertakings after caught in examinations by regulator into property promotion investment schemes
Dymphna Boholt gives undertakings after caught in examinations by regulator into property promotion investment schemes

NSW Fair Trading Commissioner Rod Stowe is warning promoters of property investment schemes across Australia "to operate legally or face sanctions."

Mr Stowe said a common theme was consumers being misled about the financial benefits of buying into a particular scheme.

“Regulators across Australia have initiated court action to stop promoters who promise financial benefits they cannot deliver on or who fail to tell people about their cooling-off rights to get out of a service they were pressured into buying at a ‘free’ seminar,” he said.

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He noted regulators closely examined the activities of traders between 2013 and 2015 with 20 traders receiving legal notices requiring them to substantiate claims made in advertisements and at their seminars.

"This prompted legal action against at least 10 entities and their associates:

  • No Loan Home Pty Ltd trading as Perth’s Easyhomes WA, Filip Butkovic, Nikola Butkovic, Patricia Susilo, Bryan Susilo and Rowan Lines, led by Consumer Protection Western Australia
  • We Buy Houses Pty Ltd and its director Rick Otton, led by the Australian Competition and Consumer Commission as a result of a coordinated investigation with NSW Fair Trading
  • Benjamin David Chislett, Creative Property Australia Pty Ltd and Benny Bull Pty Ltd led by Consumer Affairs Victoria."

"In addition, legally-enforceable undertakings were given to regulators by seven traders including Rick Otton and Dymphna Boholt who promised they would modify their behaviour, including changing their advertising and to stop making misrepresentations."

Queensland Fair Trading regulators recently secured the undertaking from the Sunshine Coast-based Dymphna Boholt who was handed a $15,000 penalty and an enforceable undertaking "not to engage in conduct that is liable to mislead the public or any individual within Australian in contravention of Australian Consumer Law (Queensland)''.

Fair Trading investigators found that Boholt made numerous claims in full-page newspaper advertisements promoting her 2013 seminars - and later at the seminars - which were found to be inaccurate.

'The I Love Real Estate Super Conference 2015 is on! and it's bigger than we've ever had before.'

The breaches of the ACL(Q) were outlined in a nine-page document published by Fair Trading suggesting claims made by Boholt in seminar presentations at the Brisbane Convention & Exhibition Centre in August 2013 over stated the level of income earned by the property investors in several instances as Boholt "failed to undertake due diligence" to ensure the investor claims were accurate.

A total of 67 education/warning letters were also issued across Australia.

“We are sending the message to the industry that they have to act fairly with consumers or face action by consumer law regulators using the Australian Consumer Law,” the commissioner said.

“Failure to do so will render the promoter liable for civil and criminal penalties, in some instances up to $1.1 million for a corporation and $220,000 for an individual.”

Before buying an investment property from a property promoter, consumers should conduct their own research and always obtain independent financial and legal advice.

Stowe said consumers should also be wary of:

  • high pressure sales tactics characterised by rushed decision making and contract signing and the payment of fees (including discounts offered to seminar attendees who sign up on the day)
  • inferences that a system is ‘government approved’
  • claims of capital growth rates that may not be independent or credible
  • spruikers who don’t allow questions or who ignore or downplay the risks and costs involved
  • spruikers who suggest specific investment opportunities such as a particular property development, as they may be receiving a commission or have an undisclosed interest in it
  • spruikers pushing people to buy properties interstate that cannot be seen, or off the plan properties that do not yet exist
  • spruikers requiring participants to sign non-disclosure agreements

 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

Tags: 
Consumer Affairs Fair Trading

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