Two consumer regulators have released warnings about dodgy property investment schemes as part of a national campaign.
NSW Fair Trading and WA's Consumer Protection have both issued statements urging consumers to be aware of the hidden dangers of property investment schemes that promise big returns with low risks.
The campaign was launched in response to continuous complaints from the victims of such schemes.
The consumer regulators have highlighted a number of warning signs for investors. These include:
NSW Fair Trading commissioner Rod Stowe said numerous complaints have been received from consumers who lost tens of thousands of dollars after being misled by dodgy property spruikers during investment seminars that they had attended.
"Consumers are advised to take the time to obtain independent financial and legal advice before signing anything, to help ensure that they are getting a good deal," he said.
National campaign ambassador Paul Clitheroe warned consumers against trusting unreliable testimonies promoting get-rich-quick schemes.
"You wouldn’t get medical treatment from someone offering the same remedy to everyone in a room, so be wary of the property spruiker who sells the same ‘investment’ scheme to everyone at a seminar,” Mr Clitheroe said.
"Basically, the spruikers are just in it for themselves and accept generous commissions once the deal is done. The investor is then left with what is probably a dud deal, more likely to lose money than make it."
Meanwhile, acting commissioner for WA Consumer Protection, David Hillyard, also expressed concern for consumers who have paid large sums of money for advice and coaching, but not received the returns they were promised.
“While there are legitimate companies that offer credible property investment advice and opportunities, equally there are a number of rogue operators that can apply high-pressure sales tactics at ‘free’ seminars to persuade people to sign up on the spot,” Mr Hillyard said.
“Typically, participants are denied an opportunity to seek independent professional advice about realistic returns and the legal and financial risks associated with the substantial investment they are considering.
“The spruikers create the impression they’re financial experts who can make you lots of money through property investment. They claim to offer safe deals where high returns are practically guaranteed.”
Mr Hillyard said consumers who have already been exposed to such schemes could potentially be protected by a cooling-off period under the Australian Consumer Law.
“If the promotional material doesn’t clearly state goods or services will be sold at a seminar, you will most likely be eligible for a 10 business day cooling-off period," he said.
“This means you have the right to cancel any commitments made on the day without penalty for items valued at more than $100.
“This right may be extended to six months if you weren’t told about this cooling-off period.”
[Related: Property spruiker jailed for fraud]
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