Consumer Affairs

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George J Nowak, of the Charterhill Group, has filed for bankruptcy after the Federal Court in Adelaide froze his assets and those of his wife back in February.
At the time, the <a href="https://www.urban.com.au/news/28647-federal-court-freezes-assets-of-charterhills-george-nowak" target="_blank">court had ordered the surrender of their passports, and restricted their travel outside of the country</a>, while ASIC investigated the collapse of the Charterhill Group.
The Charterhill Group specialized in assisting clients to invest in property with their SMSFs. This left nearly $6 million of super at risk.
Macks Advisory’s Peter Ivan Macks has been appointed as Nowak’s trustee, and he has advised that the bankruptcy came following an appointment of liquidators to companies within the Charterhill Group Lending Solutions International Pty Ltd and Nova Real Estate Pty Ltd.
Nowak, who lodged a statement of affairs with the trustee, listed 31 companies he was director and/or shareholder of.
The statement of affairs was signed and dated 30 June 2014, and lodged with the Debtor's Petition on the same day. The Debtor's Petition was accepted on 2 July 2014.
It is noted that unsecured creditors totals approximately $7 million. This includes a claim in his estate, brought by Nova Real Estate’s liquidators – of approximately $6 million.
Investigations are underway, but return to creditors at this stage is unlikely.
The following companies in the Charterhill Group were placed under external control in February:
•    Lending Solutions International Pty Ltd – liquidators appointed (Andrew Heard and Anthony Phillips of Heard Phillips)
•    Nova Real Estate Pty Ltd – external administrators appointed (Andrew Heard and Anthony Phillips of Heard Phillips)
•    EJ Property Developments Pty Ltd – receivers and managers appointed (Michael Basedow and Leigh Prior of Pitcher Partners)
•    Financial Wellness Pty Ltd – receivers and managers appointed (Michael Basedow and Leigh Prior of Pitcher Partners).
YOU MAY ALSO WANT TO READ
Investor update: <a href="https://www.urban.com.au/news/28585-investor-update-charterhill-issues-clients-apology-after-closure" target="_blank">Charterhill issues clients apology after closure</a>
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Charterhill's George Nowak files for bankruptcy following liquidation of companies

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Just as COVID-19 hit, inspectors from Consumer Affairs Victoria indicated will be checking more estate agent trust accounts, more often, for discrepancies.  
Victorian estate agents held 5,188 trust accounts worth $2.43 billion at the end of 2019. 
Inspectors were conducting random desktop inspections of estate agents’ trust accounts, searching for inconsistencies that may point to misuse of trust money, in addition to their usual on-site inspections.  
These desktop checks will significantly increase the amount of trust account inspections undertaken each year.  
During 2018-19, Consumer Affairs Victoria conducted 425 trust account inspections for compliance with relevant laws and processed more than 4,300 trust account audits.  
Increasing the number of trust account inspections will allow Consumer Affairs Victoria to act faster to identify estate agents who have broken the law.  
Estate agents will be required to produce documents to prove trust money is being handled appropriately, with inspections conducted on top of the yearly trust account audits. 
There are strict laws surrounding how estate agents should keep and file money they receive.  
Advance funds must be deposited into an estate agent’s trust account, and records must be kept showing details of each trust money transaction.  
Acting Director of Consumer Affairs Victoria Michelle Osborne said failing to handle trust account money appropriately may result in the delay or failure of property purchases, causing emotional and financial stress for those involved.  
“Consumer Affairs Victoria takes the misuse of trust account money seriously and has zero tolerance for estate agents who do so,” said Ms Osborne.  
“Good agents who have done nothing wrong have nothing to fear from the new approach.”  
Failing to appropriately manage trust money is a significant offence, with estate agents facing fines of up to $82,000, or 10 years’ imprisonment. 
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Consumer Affairs Victoria increasing the number of trust account inspections

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Consumer Affairs Victoria has commenced criminal action against Thomas Aloysius, 47, of Hallam, for alleged breaches of the Estate Agents Act 1980 (the Act) and its Regulations. 
It is alleged that, while working as an estate agent’s representative between May and June 2017, Mr Aloysius: 
<ul>
<li>advised a vendor that he had received an offer of $600,000 to purchase the vendor’s property, when the offer made by the purchaser was $620,000, and</li>
<li>accepted a $20,000 partial deposit from the purchaser into his personal bank account, instead of the required trust account. </li>
</ul>
Mr Aloysius faces six charges: 
<ul>
<li>Three relate to his alleged misuse of the $20,000, in breach of the Act. </li>
<li>Three relate to alleged breaches of the Estate Agents (Professional Conduct) Regulations 2008; these include that Mr Aloysius:
<ul>
<li>did not act in his principal’s best interests; and </li>
<li>engaged in conduct detrimental to the industry’s interests and reputation. </li>
</ul>
</li>
</ul>
The matter was brought to our attention through a consumer complaint. 
Estate agents or agent’s representatives who misuse trust funds can face penalties including fines, or jail for more serious breaches under the Act. 
The matter will be heard in the Dandenong Magistrates’ Court.
 
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Consumer Affairs Victoria commences criminal action against Thomas Aloysius over alleged missing $20,000 partial deposit

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<div>Consumer Affairs Victoria has launched a disciplinary inquiry at VCAT into estate agent Tsun Ngai Lee.</div>
<div> </div>
<div>Mr Lee, 60, of Caroline Springs, trades under the business name Ably Realtor Worldwide Agency.  </div>
<div> </div>
<div>CAV allege that Mr Lee breached his duties under Victoria’s estate agent laws by:  </div>
<ul>
<li>not complying with an existing condition on his estate agent’s licence </li>
<li>not always acting fairly and honestly in his work as an estate agent, and </li>
<li>engaging in conduct detrimental to the estate agent industry’s reputation or interests. </li>
</ul>
<div>It is also alleged that Mr Lee:  </div>
<ul>
<li>did not meet his trust account audit obligations for the 2018-19 financial year, and  </li>
<li>is not a fit and proper person to hold an estate agent’s licence.  </li>
</ul>
<div>The action against Mr Lee follows an investigation as part of our estate agent compliance monitoring program.  </div>
<div>VCAT will hear the matter at a date to be set.  </div>
<div> </div>
<div>CAV have previously taken action against Mr Lee in 2019.</div>
<div>
The estate agent trading as Ably Realtor Worldwide Agency was reprimanded, and had a condition placed on his licence, after breaching his duties under the Estate Agents Act 1980 and its regulations. 
Tsun Ngai Lee, then 59, of Caroline Springs, agreed that, among other things, he did not: 
<ul>
<li>record required information in:
<ul>
<li>a register of trust cheques</li>
<li>a trust account cash receipts journal; and </li>
<li>trust ledger accounts </li>
</ul>
</li>
</ul>
<ul>
<li>have his trust accounts audited within the required timeframe </li>
<li>keep money in the trust account until it was paid to the person entitled to it </li>
<li>at all times act fairly and honestly in his capacity as an estate agent.</li>
</ul>
Mr Lee also agreed that he had engaged in conduct detrimental to the estate agent industry.
Our staff identified the breaches during inspections at Ably Realtor Worldwide Agency. 
The matter was heard at the Victorian Civil and Administrative Tribunal.  
The tribunal ordered that a condition be placed on Mr Lee’s licence prohibiting him from handling trust monies or operating an estate agency trust account until he: 
<ul>
<li>completes two Real Estate Institute of Victoria training courses, and </li>
<li>arranges for a qualified professional to develop a compliance program, to ensure he understands and complies with his legal obligations.</li>
</ul>
</div>
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Consumer Affairs Victoria launch disciplinary inquiry into estate agent Tsun Ngai Lee

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Checking testimonials and reviews, particularly online, are one way we all do a little bit of our due diligence when looking for any type of holiday accommodation or even restaurant to go to.
Property investors also largely use them for experts and professionals to help them with their buying, renovating, building and even accounting.
In fact, they're such a powerful way to be convinced into using a particular company or individual that it's rare to see a website without them.
But, just as it's easy to write someone a testimonial - which they may, or may not, use - it's just as easy for a less-than-reputable character to be overtly selective with their testimonials or just to fabricate them completely.
WHAT IS A TESTIMONIAL
Testimonials are comments from customers and clients of a service or product that explain their service and how they found dealing with a company of person. They are heavily used as marketing tools, and for promotion, in every industry - from the Sham Wow to the back of a novel. Testimonials can be incredibly useful for finding out what other people think about a service.
You might see them in newspapers, in emails, on websites or forums (particularly the business' own website), on review websites and in brochures.
MUST KNOW
Before we get into when to be alerted by a potentially fake testimonial, for companies in Australia it's worth noting that making, relying or using false or misleading testimonials is unlawful, according to Consumer Affairs Victoria (CAV).
That means, while they shouldn't be falsified, if they are then you do have a right to notify Consumer Affairs about it.
CAV notes that businesses that regularly rely on testimonials include alternative health care businesses, restaurants, weight loss service provides and, of course, estate agents.
<blockquote>
Businesses that regularly rely on testimonials include alternative health care businesses, restaurants, weight loss service provides and, of course, estate agents.
</blockquote>
If you're a real estate company using testimonials, basically make sure they're coming from real people, you haven't paid for a review, that you note down if there has been any sort of commercial relationship with that person, that you do not delete negative reviews and that you keep records of them all.
Remember, while less common, some do use fake testimonials to purposely say bad things about a competitor as well. These are also misleading, and you'll want to keep an eye out for them.
WHAT TO BE WARY OF
Duplicate reviews in different names, or appearing in different places multiple times.
Reviews that seem to overtly suggest you use the service, often providing discounts or codes. They may even be slagging off a competitor within the same review.
Review websites that are in some way associated to the company.
Email addresses with three or more numbers at the end - suggesting this is fake and may have been created by an automated program.
If it's an Australian company that deals with primarily Australian residents, then be wary if all the reviews have Americanised spelling. This should be a surefire warning sign that there's something fishy going on.
Those that sound like advertisements (there's a specific tone to be aware of). Be alerted by anything over the top, overly endorsement heavy, and non-specific. If they have industry-specific terms or phrasing that an average person is unlikely to use - also be aware.
Websites where all the reviews are positive or where large numbers of reviews sit at either end of the spectrum. The majority of real people give reviews within the two to four star bracket, rather than the one and five stars.
<blockquote>
The majority of real people give reviews within the two to four star bracket, rather than the one and five stars.
</blockquote>
Gut feeling is a powerful thing. Would this be something you could see yourself writing if you had the same good/bad experience? If not, why not?
Do they overtly use words and phrasing that a typical person would not? For instance, they may refer to a iPad Mini as an iPad or an iPad Mini, but it's unlikely they'd refer to its complete specs in a review e.g. iPad Mini 16GB with retina display and Wifi. Similarly, phrasing might be a little... off, particularly if cliched.
Not everyone is a wordsmith, and it's likely some people will use typical phraseology to review an item, but something like the following sentence reeks of falsity: "Great buying experience, couldn't be happier - now on my way to millions!". Unconvinced? So are we.
While not everyone will allow you to check their identity, usually there's at least one person with their full name (in which case, is it a "common" name that cannot be verified?).
If photos are with the testimonial - are they stock photos? Have you seen them used elsewhere? Search the photo through Google images' search function or through a reverse image search. Just because a photo has been included, it doesn't mean it's real.
Have you checked reviews across a number of sites? If you haven't it's time to get Googling a little more. Check out forums, where unhappy clients may be able to tackle false reviews more easily by providing their own experiences.
Look for links. Links to a person's blog or own website can be a powerful thing, suggesting they're a real individual. However, a 'tracking' link or a link that redirects you suggests that the review may be paid for.
If you're wanting to verify any further, then Property Observer suggests calling the company in question and asking for contact details for the person who provided the review - or for your contact detail to be passed on (such as an email).
Video testimonials can be even more convincing for some, however how do you know when the video was taken? Was the reviewer halfway through a seminar, or about to head in? Again, it's worth asking to contact the individual themselves.
Think you've seen a false review on a property product online? Email: <a href="mailto:jduke@propertyobserver.com.au" target="_blank">jduke@propertyobserver.com.au</a>
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How to tell if a testimonial is fake: Spruiker alert

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Cyber fraudsters are believed to be behind a total of $50,000, made in three payments, out of a Broome real estate agency's trust account. It is believed the criminals accessed the agency's online banking system after a compromised email saw malware installed.
One of the recipients receiving regular payments had their account details altered on a pre-entered list, seeing their $50,000 redirected to another's account. Then, the details were changed back to the original to avoid detection of the fraud.
The agency has been reimbursed by their bank since the incidents in February.
In March last year, another agency experienced a similar case of cyber fraud, seeing $50,000 stolen through two BPay transactions from a trust account. The bank detected these cases early, and recovered the funds.
As a result, Commissioner for Consumer Protection Anne Driscoll has put out a warning to real estate agents, and settlement agents, to be wary of fraud. She also suggests that strict security protocols are in place for computer usage.
“While the property industry has been targeted in these cases, fraud of this kind can affect any business so it’s essential that businesses have procedures and protocols in place to prevent unauthorised access to their computer system and systems to detect malware,” Driscoll said.
“Staff should be trained to ensure that suspicious emails are deleted immediately, attachments are never opened and links never activated. Having up-to-date anti-virus and anti-malware software is essential for any business."
She suggested that agents manually input bank account details of clients when making electronic bank payments, rather than using pre-entered lists.
These are not the only type of cyber scams around - in 2012, <a href="https://www.urban.com.au/expert-insights/investing/16841-vigilant-applecross-perth-estate-agency-prevents-another-fraudulent-house-sale-nigerian-scam" target="_blank">a vigilant Applecross, Perth agency managed to avoid being victim to cyber crime</a>.
CONSUMER PROTECTION'S ANTI-FRAUD ADVICE:
<ol>
<li>Have the latest security software (anti-virus, anti-spyware, firewall) installed on computer systems and keep the operating system up-to-date. 
</li>
<li>Remind staff of basic electronic security measures. If suspicious emails contain an attachment, do not open them as they may contain malicious software (malware or spyware). Do not click on any links within these emails and delete them immediately. 
</li>
<li>Be wary of unsolicited emails purporting to be from your bank as these may be phishing scams. 
</li>
<li>Be aware that banks will never ask you to supply any of your details via email. 
</li>
<li>Consider using security tokens or set up a mobile phone security code protocol when using e-banking and verifying all payments. Ensure the device protocols are set to the highest possible level for all staff members. 
</li>
<li>Revise transaction limits and reduce them if they are too high. Sometimes it’s safer to make smaller multiple payments than allow for one large payment to be made from your bank account. 
</li>
<li>Tyoe the address into the address bar when accessing online banking. Never click on an online link or ‘favourites link’ to access your bank’s webpage as these can be manipulated to send you to a counterfeit site. While these sites may look similar to your bank’s webpage, fraudsters operate them to obtain your personal banking details and passwords. 
</li>
<li>Staff members should enter a payee’s bank account details manually whenever they make an electronic funds transfer.</li>
</ol>
Property Observer suggests that investors should ask their agents how they protect themselves, and their clients' information.
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Cyber criminals steal $50,000 from Broome real estate agency trust accounts

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A proposal to deregulate fees charged by settlement agents and land valuers in Western Australia has Consumer Protection calling for comment.
This would be a move to bring Western Australia back in line with all the other states in Australia, as they are currently the only state to fix a maximum amount that these experts can charge for their services.
With 660 licensed settlement agents, and 840 land valuers, across the state it could help competition and red tape reduction if the fee schedule is removed, according to Acting Commissioner for Consumer Protection, Gary Newcombe.
The other states, where there is not this level of regulation, competition is what keeps charges low. Newcombe said that, as a result, having a mandated maximum is unnecessary.
“In fact, discounting by settlement agents and land valuers in WA’s competitive market often means that fees well below the maximum allowed are being charged, demonstrating that there is little benefit to consumers and further cementing the case for deregulation,” he said.
“If fees were to be deregulated, there would be a provision for consumers to be provided with information about the fees being charged that would help them assess the services being offered and make an informed choice about service providers.”
The deregulation of fees for real estate and business agents, which occurred in 1998, will be the modelling for this legislation. At the time, there were no adverse effects recorded.
“Consumers would continue to be protected by the Australian Consumer Law and industry professional standards would be maintained by the licensing and codes of conduct obligations placed on settlement agents and land valuers which will remain firmly in place, regardless of any fee deregulation,” he said.
Comments can be made until 31 July 2014.
{module Do you think settlement agents and land valuers' fees should be deregulated?}
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Should West Australian settlement agents and land valuers’ fees be deregulated?

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Have a reno planned for this Easter weekend coming (or some home improvement), then play it safe is the message from Consumer Affairs Victoria.
It might not be glam, but it is falls that are on their radar, with eighty-two people passing away in Victoria between 2000 and 2011, in particular the elderly.
Eighty-two people died after falling from ladders in Victoria, between 2000 and 2011, with most of these people being aged over 65.
However, there are a number of safety issues for all Australians looking to give renovating an attempt.
LADDER TIPS Source: Consumer Affairs Victoria
<ul>
<li>Before getting on the ladder:</li>
<li>Check that your ladder is in good condition</li>
<li>Place it on dry, firm and level ground</li>
<li>Check all safety locks and braces are in place.</li>
</ul>
Other things to check:
<ul>
<li>Ensure the ladder has non-slip safety feet</li>
<li>Read safety warnings and follow the manufacturer's advice</li>
<li>Wear non-slip footwear</li>
<li>Keep people and vehicles away from the ladder while you are working</li>
<li>Work within your arm’s reach and avoid leaning out</li>
<li>Only climb as far as the second step from the top of a step-ladder or the third step from the top of a straight ladder</li>
<li>Never put the ladder on top of other objects to gain extra height.</li>
</ul>
ASBESTOS TIPS
Another common area of safety scares are when it comes to asbestos. We have written a number of articles about preparing for this eventuality.
With renovations becoming increasingly popular, and <a href="/news/26691-tues-oct-8-asbestos-found-in-one-in-four-pre-purchase-inspections" target="_blank">asbestos reportedly found in one in four building inspections</a>, it makes sense to be careful around this deadly material. Apparently, <a href="https://www.urban.com.au/news/nsw/27673-how-is-asbestos-affecting-you-61-of-renovators-affected" target="_blank">61% of renovators are exposed</a>.
Don't let this <a href="https://www.urban.com.au/expert-insights/investing/27689-asbestos-and-the-danger-to-tenants" target="_blank">silent killer lurk in your home</a>.
<a href="/news/29162-how-to-choose-a-building-and-pest-inspector" target="_blank">Choose a good building and pest inspector</a> when you purchase, or before any extreme renovations, so you know what you're up against.
This will quickly alert you to the asbestos that you should call the professionals in for. Don't DIY asbestos removal and disposal. Keep your mouth and nose covered when around the substance.
GENERAL TIPS
Unless you have been trained in certain areas, we recommend bringing in the professionals.
Electricity - get an electrician in to do the difficult jobs around power. It just isn't worth the potential danger.
Balcony fixing or installation - <a href="https://www.urban.com.au/expert-insights/investing/27570-balcony-safety-regulations-are-still-falling-short" target="_blank">Too many deaths have happened</a> to make this an excusable area for a dodgy reno. 
Swimming pools - Once again, this is a high risk area. Bring in the experts and ensure you're compliant.
When undertaking a renovation, ensure to have protective measures for all those on site - face masks, goggles, gloves and appropriate clothing. Be orderly and organised, and have required medical supplies with you at all time.
Ensure your Easter renovation works out as successfully as you had hoped!
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Easter weekend renovators: Tips from Consumer Affairs Victoria

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The much discussed practice of underquoting, or bait pricing, has attracted the interest of Consumer Affairs Victoria, who have announced they will be keeping a close eye on the property market, and specifically auctions, this autumn season.
The practice of underquoting, much-discussed on Property Observer, has director of Consumer Affairs Victoria Claire Noone set to catch out real estate agents misleading prospective buyers. This is timely, considering the potential Queensland change to legislation to stop all price guides at auction in <a href="/news/qld/29277-queensland-auction-price-guides-the-more-info-the-better" target="_blank">a bid to solve the issue of underquoting that the REIQ claims is rampant in the auction-heavy capitals</a>.
"In this peak auction period, we are gathering market intelligence through online monitoring and other data collection methods," Noone said. 
"We will be watching for any misconduct during the buying and selling process - from the moment a property is advertised to when deposits are paid and held in trust accounts.”
She also expressed that staff would be attending auctions to ensure they are “conducted according to auction rules”. Property Observer welcomes this attention into the issue, particularly surrounding the announced attention being paid to indicators of misleading price advertising and campaigns.
However, Noone also urged prospective buyers to ready themselves with auction rules, including price advertising and underquoting, prior to attending auction so that they can be prepared.
"Comparing the initial advertised price with the sale price is not evidence of underquoting," Noone explained. 
"Underquoting is when an agent misleads a prospective buyer about the likely selling price of a property for sale.”
She explained that examples of this included when a property is advertised or quoted to a prospective buyer at a price lower than the seller’s asking price or auction reserve price, the agent’s estimate of the selling price or a genuine offer or expression of interest.
Property Observer recently attended a <a href="finding/29729-agent-underquoting-will-not-always-help-buyers-get-the-price-they-want" target="_blank">Sydney auction that was potentially a case of underquoting</a>, with a reserve price set some $200,000 above the price guide.
Noone also reminded buyers that, at auction, you will not be able to make a contract subject to conditions and that there is no cooling off period.
Underquoting is a regularly debated topic. Recently, <a href="/expert-insights/investing/27011-underquoting-the-auction-systems-necessary-evil" target="_blank">observer Mark Armstrong referred to is as the auction system’s “necessary evil”</a>, meanwhile a petition has been started by buyer’s agent Patrick Bright for the <a href="/news/29454-online-petition-for-mandatory-reserve-price-publishing-launched" target="_blank">mandatory publishing of reserve prices</a>.
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