28 Nov ACCC gets a scammer – Peter Koulizos
The record $18 million fine imposed on a property spruiker for misleading property buyers and investors proves that urgent regulation of property investment advice is needed, according to the Property Investment Professionals of Australia Chairman Peter Koulizos. He gives us more detail on the judgement against property spruker Rick Otton.
Kevin: One of the biggest property stories probably to hit my desk, this year anyway, was a record $18 million dollar fine that’s been imposed on a property spruiker for misleading property buyers and investors. And in a release from the Property Investment Professionals of Australia, their president, Peter Koulizos, congratulates ACCC on this action. He joins me. Peter, thanks for your time. It’s a very welcome move, I think. But probably long overdue.
Peter: Oh, I agree 100%, Kevin. It is fantastic. Congratulations to the chairman of the ACCC, Rod Sims, and the ACCC itself, for this action. The penalty is huge. But I shudder to think if they penalise him and his We Buy Houses group $18 million dollars how much did he actually rip off people? Like it would be much more than that you would think. But it’s certainly long overdue and in my opinion it is just a huge example of why we need property investment advice regulations so we can stop or help prevent these people from doing damage right at the beginning rather than waiting for something huge like this to happen.
Kevin: Okay, well I want to talk to you about that but before we do let’s give a bit of background on this. The federal court has imposed a penalty of $18 million dollars against We Buy Houses and its’ director, Rick Otton for making false and misleading representations about how people could create wealth through buying and selling real estate. There are a number of schemes that he did Peter, which I guess, the one that’s most prominent is, you know, he wrote a book called Buy Real Estate For A Dollar Down, which really was all to do with rent to buy and a whole lot of other schemes that involved vendor financing.
Peter: Well, I mean you labelled him very kindly there Kevin. You called it schemes, I would call them scams. But either way that’s, it is certainly misleading to tell people you can buy property for a dollar down or buy property without any of your money or equity, and a lot of those other misrepresentations that he was making.
Kevin: Well, I jumped on the internet, had a quick look around, I put Rick Otton’s name in, I put in We Buy Houses and there’s a whole lot of information in there going back to, I think the schemes have been around, or the scams as you put it, have been around since the early 2000’s. And there are some people who totally believe in it. There’s some good press on it but there’s also some very bad press. The thing that concerns me Peter, is there is no one go to place where people can learn about the people who are running these scams. It’s long overdue for us to have a list, either supplied by the ACCC of people who are currently being investigated.
Peter: I think that’s an excellent idea, Kevin. It would be great to be able to warn consumers. You know, here are some people that have been charged with offences, you want to be very careful about getting advice or getting any sort of service from these people. I am sure your listeners would know, they may even have some personal experience of dealing with dodgy operators so rather than getting it from top down and that is from ASIC or ACCC, you know maybe we can get it from the bottom up and you know, go direct to the consumer and ask them, you know do you have any information that we can further investigate?
Kevin: Okay, I think it’s a great idea and we’ll put the call out now. If you do have some information we’re not gonna make it public, we won’t put you in a situation where you could be sued. We want to thoroughly investigate the information. So if you’ve got a situation that has occurred to you, right or wrong, send it to us and we’ll treat it very confidentially.
Kevin: Peter, maybe we could pass it on to PIPA and you could do some due diligence and then with a view to, if there is some sort of action against a particular person, maybe we can make that public knowledge.
Peter: I think that is an excellent idea. As a volunteer organisation we can’t do much, especially if they’re not a member of PIPA, and if they were a member of PIPPA they certainly wouldn’t be a member much longer. But we are certainly, we are there to help clean up the property industry. Ideally we want regulation and minimum educational qualifications for people in the industry. But I think this is another avenue, you know? Let’s try to get at the crooks before they do too much damage or make ACCC aware of what’s happening or ASIC or somebody so that we can prevent this sort of thing happening again, because $18 million dollars is a very big number but even if it was only $100,000 dollars to a particular client or customer, that’s a lot of money. That could set them back a very long time so far as their wealth creation is concerned. So I ideally want to see the industry cleaned up and PIPPA’s more than happy to play their part in whatever way is deemed useful.
Kevin: Okay, well PIPA, we are members of PIPA of course. It’s the Property Investment Professionals of Australia. It’s a non profit association established by industry practitioners and with the objective of representing and raising the professional standards of all operators involved within the property investments sphere.
Kevin: The website, you can get to it on our website, it’s just PIPA.asn.au. Peter Koulizos is the president of that organisation. He joins us to make regular commentary and what we’ll love you to do is send in any details about a scam that maybe you’ve been impacted by. We’ll treat it in confidence, we won’t make it public until we’ve done our due diligence, and we’ll certainly pass it on to PIPPA, and we’ll do our own investigations as well.
Kevin: Peter, a long-winded way to say thank you for your time and a farewell. But I know we’ve got you in the car with such an important story I want to get onto it immediately so thank you very much for your time, Peter.
Peter: Thank you, Kevin. Much appreciated.