9 Jul 2014

Australia warns property "spruikers"

3:49 pm on 9 July 2014

Australian consumer authorities have written to companies promoting property investments, warning them they must abide by consumer law.

Three state governments have written to the so-called property spruikers, reminding them they face penalties of up to $AUST1.1 million if they mis-sell investments, the ABC reports.

Victoria's Consumer Affairs Minister, Heidi Victoria, says some companies use high pressure sales tactics

"When people come along to a free seminar they perhaps are coming along just for information but then feel obliged to either spend money on an education programme, or that type of thing."

Ms Victoria says the authorities want to ensure there's a cooling off period when prospective investors can get legal and financial advice, so they don't fall prey to powerful and convincing salespeople.

In New Zealand, the Blue Chip group of property investment companies failed in 2008, owing $84 million to 2000 investors.