Consumer Affairs Victoria accepts undertaking from Accrue Property
Accrue Property, a Melbourne real estate business complained today that it has been unreasonably caught up in Consumer Affairs Victoria (“CAV”)’s recent mandate to target property spruiking and wealth creation businesses being conducted in Victoria. Headlines in the press and on the internet touting the results of an alleged ‘compliance check by CAV’ with terms like "hype property firm punishes broker" do not accurately reflect what actually took place.
Headlines such as "Brokers have been sent a powerful message that they must be able to substantiate any marketing about the value of buying real estate. Consumer Affairs Victoria announced that it had accepted an enforceable undertaking" are not accurate reporting – first and foremost, Accrue Property is not a finance broker or financial advisor.
Accrue Property is a property consulting business, which aims to assist people who have already made up their mind to buy property by providing various services in respect of their client’s property acquisitions. While they assist clients to obtain financial advice through a referral service with third party financial advisory companies or brokers, Accrue Property does not in fact offer any financial advice. In fact, Accrue Property strongly recommends that all their clients obtain independent legal, financial, taxation and accounting advice before making any decisions to acquire any property.
Recently, the real estate firm was approached by the CAV to substantiate some of its historic advertising content that in the CAV’s opinion related to or was suggestive of the notion of “property investment”.
Notwithstanding that the particular statements which the CAV took issue were minor and inconsequential in nature and that Accrue Property is a real estate agent not a finance broker, in the spirit of goodwill and compliance, the directors of Accrue Property cooperated with the CAV to remove any content that in the CAV’s sole opinion gave the impression that Accrue Property provided wealth creation or property investment advice. Furthermore, Accrue Property provided a general undertaking that it would ensure any future marketing and advertising material relating to property investments (if any) would be compliant with advertising laws and regulations.
Importantly, the undertaking merely states that Accrue Property acknowledges that the CAV in their opinion believe that there could have been contraventions of advertising laws and regulations relating to property investments. Accrue Property denies that they have contravened these provisions.
According to Accrue Property they offered this undertaking despite the fact that Accrue Property had not received any complaints from their clients nor had CAV received any complaints from the general public.
Indeed, complying with the CAV’s requests and making a small contribution to a legal fund was not an issue for Accrue Property, who was already compliant with the current regulatory framework and, if anything, needed to update its old and outdated marketing materials.
It seems that Accrue Property was ‘caught up’ in an unfortunate situation – targeted by a government mandate to investigate businesses in the property spruiking and ‘wealth creation’ industry – to which Accrue Property and its business was incorrectly and unjustifiably categorized.
Accrue Property does not participate in the property spruiking industry. It carries on a business as a real estate agent, assisting people who want to buy and sell property. They offer a unique service attempting to provide their clients with referrals for services, which their clients may need during the purchasing acquisition process. Whilst they have acknowledged their general obligations under consumer protection laws by offering an undertaking to the CAV, Accrue Property denies that they have participated in conduct which contravenes the advertising regulations as the recent articles have purported or alleged.
The payment to CAV was a compliance levy of a $5,000 donation and that was paid willingly as there was nothing to defend as it was a compliance audit not a prosecution or offence investigation and the cost of not agreeing to the CAV terms would lead to lawyer's fees that would exceed this fee?
