The ACCC issued the following media release today (selected extract only):
Following a coordinated investigation with the New South Wales Fair Trading (NSW Fair Trading), the Australian Competition and Consumer Commission has instituted proceedings in the Federal Court against We Buy Houses Pty Ltd and Rick Otton for alleged contraventions of the Australian Consumer Law.
The alleged conduct includes several representations made to consumers that, by attending seminars and boot camps, consumers will be taught strategies to enable them to, for example:
o buy a house for $1
o buy a house using little or none of their own money
o build property portfolios without their own money invested and without new bank loans.
The ACCC alleges that 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. For example, in the context of the ‘rent to buy’ strategy, the ACCC alleges that this strategy only allows a consumer to secure an option for $1 to purchase a house at a later date, subject to payment of the full purchase price in order to exercise the option.
“The ACCC is concerned that the strategies promoted by We Buy Houses and Mr Otton target vulnerable consumers who don’t qualify for bank loans or who are having difficulties meeting their mortgage repayments,” ACCC Chairman Rod Sims said.
For further details, go to the "Media releases" section of the ACCC's website.