ACCC's Rick Otton disqualification pursuit underway in Federal Court
The consumer watchdog proceedings in the Federal Court against best-selling property investment author Rick Otton and his business We Buy Houses for alleged breaches of the Australian Consumer Law has had its initial directions hearing.
Otton is the author of How to Buy a House for a Dollar.
The Australian Competition and Consumer Commission (ACCC) is seeking declarations, pecuniary penalties, permanent injunctions, corrective advertising and costs against We Buy Houses and Otton. The ACCC is also seeking a disqualification order against Otton.
The ACCC claims Otton made representations to consumers that by attending seminars and boot camps they would be able to buy a house for $1, buy a house using little or none of their own money and build property portfolios without their own money invested and without new bank loans.
The seminars and boot camps range in cost from $2,997 to $17,000 for a mentoring program.
The ACCC claims the strategies do not enable consumers to buy a house for $1 but rather involve consumers acting as middlemen to facilitate property transactions between third party sellers and third party buyers.
Otton had provided a statement defending his business and book.
“It seems that the ACCC thinks that the public are fools, that they will take the title literally and think that they only need a dollar to buy a house,” he said.
“It’s a sad day when the ACCC thinks the Australian public is that foolish that they don’t understand that the dollar is just the start of the process.”
ACCC chairman Rod Sims said in a statement that the watchdog is concerned the strategies promoted by We Buy Houses and Otton “target vulnerable consumers who don’t qualify for bank loans or who are having difficulties meeting their mortgage repayments”.
Otton came under scrutiny in 2013 when his seminars in Western Australia were banned by the Department of Commerce on the basis of misleading advertising.
The matter is listed for a case management hearing on 26 May.