‘High-risk agents’ under investigation

‘High-risk agents’ under investigation

12 January 2016 by Nick Bendel 0 comments

Consumer Affairs Victoria (CAV) is investigating six offices for underquoting, following consumer complaints and its own monitoring efforts.

A spokesperson would not disclose the names of the businesses in question, but told REB that Consumer Affairs had launched “six major underquoting investigations” involving both franchise and independent offices.

The spokesperson said CAV has planned to inspect the sales files of at least 200 auctions in 2015-16, but that “this is expected to lead to many more inspections”.

The inspections started in July 2015 and are focused on the spring and autumn auction seasons. They cover the entire sale process – from the listing presentation to the final sale – and are targeting hotspots such as Melbourne's inner eastern suburbs, according to the spokesperson.

“The sales and agents targeted for inspections have been chosen in a variety of ways, including the monitoring of sales and auctions online, intelligence received identifying a small number of high-risk agents, and consumer complaints which showed evidence of underquoting,” the spokesperson said.

The spokesperson said these agents had either received statutory notices from CAV requiring documents to be produced or were visited unannounced.

Agents who did not respond or who cannot justify their advertising face unannounced inspections – and enforcement officers are then allowed to view as many sales files as they like.

“This is the first time CAV has used this strategy against underquoting. Intelligence gathered during those inspections is currently being assessed, with further inspections underway in 2016,” the spokesperson said.

Consumer Affairs stated it received about 320 complaints in the previous three financial years – about 120 in 2014-15; 120 in 2013-14; and 80 in 2012-13.

However, convictions are difficult to achieve since underquoting is a criminal breach and must be proven beyond reasonable doubt, according to the spokesperson.

“In gathering adequate evidence, CAV relies on the cooperation of witnesses and the existence of documents which would prove the offence,” the spokesperson said.

“Sometimes complainants also misunderstand what constitutes underquoting and are simply comparing the estimated selling price against the auction reserve or final sales price.”

[Related: Principal makes agency agreements available to buyers]

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