PROPERTY SPRUIKERS MUST OFFER A COOLING OFF PERIOD

Promoters of property investment schemes who hold ‘free’ public seminars throughout Australia are being warned by consumer protection agencies they must provide information about cooling off periods.

NSW Fair Trading Commissioner Rod Stowe said Australian Consumer Law regulators were examining the practices of a number of promoters.

“A common theme is to offer consumers the opportunity to attend a ‘free’ seminar with the understanding they will be getting information or advice to help them invest in the property market,” he said.

“Consumers do not expect to be placed into a high pressure sales environment where they will be expected to buy a training package or other sales materials.”

Property investment promoters are being reminded to include the mandatory statement on the consumer’s right to terminate within a specified cooling-off period in all contracts entered into with those who attend and sign-up for these packaged educational seminars.

Mr Stowe said the 10 business day cooling off period, which is mandatory for unsolicited sales under the Australian Consumer Law (ACL), applies if the consumer is sold a product or service during the seminar which was not the promoted purpose of the seminar.

“Consumers who respond to the advertisements and attend these seminars may not be aware they were going to be sold educational services,” he said.

“Under the ACL, consumers are legally allowed a cooling off period which gives them the right to cancel the contract they signed at the seminar within 10 business days.

“Consumers who have not been afforded this protection are entitled to a longer cooling-off period if the mandatory statement is not included.”

Unsolicited consumer agreements include those made at a place other than the business premises of the trader. As these seminars are usually held at public venues such as hotels or hired conference room facilities, they are covered by the ACL.

“Even though a consumer may voluntarily attend these seminars to obtain free information, they may not have anticipated entering into a sales contract. The cooling off period will therefore apply, unless the promotional material clearly states that education or other services will be sold at the seminars,” Mr Stowe said.

“I also remind promoters that it is a fundamental requirement of the ACL that only true and accurate information is given during the presentations at these seminars.

NSW Fair Trading and ACL regulators in other states and territories will be monitoring promoters’ content for any false or misleading representations and will expect any claims made to be verifiable.”

Failure to do so will render the promoter liable for civil and criminal penalties of $1.1 million for a corporation and $220,000 for an individual.