Real estate owner Rick Otton and his company We Buy Houses were fined $ 18 million after falsely telling consumers that they could buy a house for $ 1.
The Federal Court imposed on Otton and his company the most severe penalty as a result of an action by the Australian Competition and Consumer Commission (ACCC).
Otton organized free seminars during which he told investors that they would learn how to buy a house for a dollar without the need for a deposit, bank loan or real estate experience. In addition, he misled them into believing that they could create passive income streams in the property, which would allow them to quit their jobs, build a real estate portfolio and make profits immediately.
The PIPA (Property Investment Professionals of Australia) believes that the authority has made the right choice. PIPA President Peter Koulizos said the record fine indicated that ACCC was keen to take action against deceptive operators who are pushing consumers to believe in an unachievable level of financial success.
Koulizos said that real estate investing is a long-term wealth creation strategy, with most successful investors owning real estate for 20 years or more. Therefore, Australians should be warned that anyone promising short-term profits is a spruiker and not an expert.
"We would like to thank the ACCC for staying the course on an investigation opened in 2015, which resulted in a fine of $ 18 million," Koulizos said.
He also pointed out that these circumstances were explained by the fact that there was no regulation on real estate investment advice. He said that the absence of stricter rules creates fertile ground for greed and bad behavior, and that the general public is at stake.
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