Following a coordinated investigation with the New South Wales Fair Trading (NSW Fair Trading), the ACCC 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:
- buy a house for $1
- buy a house using little or none of their own money
- 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.
The alleged representations were made in a number of mediums since at least 1 January 2011 including in published materials, on websites and during various events such as seminars and “boot camps”.
The ACCC has obtained a delegation from ASIC to also institute proceedings under the ASIC Act as some of the matters may fall within the financial consumer protection jurisdiction of ASIC. The ACCC has been assisted by other Australian Consumer Law regulators particularly NSW Fair Trading and Consumer Protection WA. The ACCC is seeking declarations, pecuniary penalties, permanent injunctions, corrective advertising and costs against We Buy Houses and Rick Otton. The ACCC is also seeking a disqualification order against Mr Otton.
Members of the public can attend these boot camps and other training programs at costs which range from a minimum of $2,997 for a boot camp and up to approximately $17,000 for the mentoring program.