Underquoting is a significant problem for Victorian home buyers, the state regulator has warned, as a real estate agency in the blue ribbon suburb of Richmond was handed a record fine for duping customers.
Hocking Stuart Richmond was ordered to pay $330,000 (£259,228.13) for manipulating 11 house price estimates to deceive home buyers with “the illusion of a bargain” and drive up its profits.
The Richmond-based franchise created an “enticing but illusory and misleading marketing web” that inconvenienced, disappointed and deceived customers, a Federal Court judge said.
“Price is an essential piece of information about the property being offered for sale,” Justice John Middleton said.
“Some (home buyers) may have missed the opportunity to buy elsewhere, being lured to a bargain that did not, and was never going to, eventuate.”
Consumer Affairs Victoria, which prosecuted Hocking Stuart Richmond, currently has 13 more underquoting investigations underway.
Its director Simon Cohen says there is “no question” there is a problem with underquoting in Victoria.
“We have seen at consumer affairs a significant increase in the number of complaints we have received about underquoting.”
“We currently have 13 investigations underway in relation to underquoting, which makes it the most significant nature of real estate practise we’re presently investigating.”
He said Justice Middleton’s penalty will have a “chilling effect across the industry”.
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