24 August 2017

Huge fines for misleading and deceptive conduct

Hocking Stuart Richmond, a Victorian real estate agency has been fined $330,000.00 for engaging in misleading and deceptive conduct, by underquoting house prices to potential buyers.  Hocking Stuart Richmond was found by the Federal Court in Director of Consumer Affairs Victoria v Hocking Stuart (Richmond) Pty Ltd to have underquoted house prices for 11 Victorian properties in 2014 and 2015 in contravention of the Australian Consumer Law and the Victorian consumer protection legislation.

The Australian Competition and Consumer Act 2010 as well as the Victorian consumer protection legislation prohibit misleading and deceptive conduct, which includes engaging in conduct that misleads or deceives consumers or is likely to do so, irrelevant of a business’s intention.

In addition to the fine of $330,000.00, Hocking Stuart Richmond must also:

  • pay the legal costs for the proceedings, which may be up to an additional $90,000.00;
  • publish a notice in the real estate lift-out of ‘The Age’ summarising the court’s judgment;
  • display a notice regarding their contraventions at their office for six months; and
  • employ a compliance officer to ensure future compliance with the Australian Consumer Law.

This is the largest fine ever ordered for this type of conduct in Victoria and is also unlikely to be the last as Consumer Affairs Victoria has indicated that it is continuing another 13 investigations of potential contraventions of the consumer law in the property sector.

This decision is among the ever increasing court enforcement action under the Australian Consumer Law and comes as an important reminder of the seriousness of business’s obligations under the Australian Consumer Law and the importance of staying compliant.

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