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Dozens of Victorian real estate agents and agencies have been slapped with fines and warnings for underquoting, handed down by a taskforce cracking down on the dodgy practice.
A total of 48 underquoting infringement notices – amounting to more than $520,000 in fines – along with 37 official warnings to 29 real estate agencies, were issued by Consumer Affairs Victoria during the 12 months to 30 June.
These enforcement actions were the outcome the Consumer Affairs Victoria’s underquoting taskforce taking proactive tracking of hundreds of sales campaigns, attending auctions and inspecting agents’ premises throughout 2022-23, often after receiving tip-offs from members of the public.
Minister for Consumer Affairs Danny Pearson said unscrupulous agents were on notice and the annual results produced by the taskforce revealed businesses looking to take advantage of home buyers were playing a “high-risk game”.
“Underquoting is a scourge – we are stamping out this unacceptable behaviour to protect Victorians and make sure everyone has a fair chance at buying a home,” he stated.
Established in September 2022, the Victorian government has allocated $3.8 million for a dedicated taskforce aimed at combating underquoting in the state’s real estate market.
During its announcement, Minister for Consumer Affairs, Gaming and Liquor Regulation Melissa Horne said the establishment of the taskforce “sends a strong message and will ensure those doing the wrong thing are held to account”.
She stated that the state government is cracking down on underquoting “because it is not only unfair and wastes house hunters’ time and money at a time when every dollar courts – it’s also illegal”.
“Purchasing a property is one of the biggest decisions people make and they deserve honest pricing to make informed decisions about how they spend their money,” she added.
However, the Real Estate Institute of Victoria (REIV) at that time questioned the “unjustified” need for such a pursuit, with chief executive officer Quentin Kilian criticising the high cost to be shouldered by taxpayers.
And while the consumer regulator says it has done considerable work stamping out a practice that “distorts the property market and can waste time and money for people looking to buy a home”, Mr Pearson warned unethical or suspicious practices are not acceptable and that every agent is “on notice”.
He also called on the general public to help identify agents and firms that are toeing the line. “If you see something that doesn’t seem right, make a report and that will help the taskforce do its work.”
Consumer Affairs Victoria reminded agents that advertising or advising a price lower than the seller’s asking price, the agent’s current estimate or a price from a rejected offer is illegal.
It also emphasised agents are required to update price information if changes occur during the sales campaign.
The government agency warned real estate agencies that underquoting practices could result in penalties of more than $36,000 and the loss of sales commissions, along with potential penalties of up to $10 million for corporations and $500,000 for individuals under the Australian Consumer Law.
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