Property spruiker Rick Otton and his company We Buy Houses were fined $18 million after falsely telling consumers that they could purchase a house for $1.
The Federal Court has imposed the highest penalty yet against Otton and his company following action by the Australian Competition & Consumer Commission (ACCC).
Otton held free seminars where he told investors that they would be taught how to buy a house for $1 without needing a deposit, bank loan or real estate experience. In addition, he misled them into believing that they could create passive income streams through the property, which would allow them to leave their jobs, and build a property portfolio, as well as gain profits immediately.
The Property Investment Professionals of Australia (PIPA) believes that that the authority made the right call. PIPA Chairman Peter Koulizos said the record fine was an indicator that the ACCC was serious about taking action against deceitful operators who lead consumers to believe in an unachievable level of financial success.
Koulizos said that property investment is a long-term wealth creation strategy, with most successful investors owning property for 20 years or more. Hence, Aussies should be warned that anyone promising short-term profits is a spruiker and not an expert.
“Hats off to the ACCC for staying the course on an investigation that began in 2015, which has resulted in $18 million worth of penalties,” Koulizos said.
He also pointed out these circumstances happen because there isn’t any property investment advice regulation. He said that the lack of stricter rules creates a breeding ground for greed and bad behaviour, and the general public is put at stake.
