The government of Western Australia is warning potential investors against east coast property spruikers, following a spate of so-called ‘free’ property investment and wealth creation seminars held by groups based out-of-state.
Commissioner for Consumer Protection in WA, Anne Driscoll, says a number of eastern states’ operators have been conducting the ‘free’ seminars in WA and more are scheduled – but that those who attend may not be getting what they expect.
“The advertising of these seminars give the impression that those who attend simply receive free information about how to secure their financial future but, in fact, they are subjected to high pressure sales tactics that promote coaching and mentoring programs costing between three and ten thousand dollars ,” says Driscoll.
Yet Perth-based general manager of sales and operations at AFG, Mark Hewitt, says questionable property investment seminars have been around for decades – and certainly aren’t unique to WA.
“I think property investment seminars have been common place in the market for probably 30-plus years and I don’t think they’re distinct to Western Australia; they were quite common in southwest Queensland at one point and I still think they probably are.
“If anything,” adds Hewitt, “it’s ‘buyer beware’. Obviously, you need to make sure everything adds up.”
Driscoll says the seminars highlight the benefits of property investment, while downplaying the risks involved.
“They also appear to exaggerate the potential gains from property and other investments by following the promoter’s programs. The seminars appear to be just a clever sales tactic to get people into a room for many hours with the hope that they will sign up to expensive training courses, but very little information is offered for free. The question to ask is what would be the benefit to a promoter of holding a ‘free’ seminar if they didn’t sell something at the event?”
“We believe some of the courses and programs on offer are just the next stage to get investors to make large financial investments that will be of benefit to the promoter, or simply a way to sell their coaching and mentoring packages.”
Driscoll says Consumer Protection officers have attended three separate seminars and report that all followed a similar formula:
The seminars were free to attend but were mainly a forum to sell expensive mentoring and coaching programs;
They downplay the risks and costs involved in property investment;
Claim to offer the secrets to financial success;
Presenters offer hints or teasers at the seminars, but participants had to pay for programs to get any further information and
’Special’ rates for the programs were offered if attendees signed up on the day
“I am concerned that the practice of offering special discounts to sign up on the day is designed to prevent the participants from having time to think carefully about their decisions and getting some independent professional advice,” the Commissioner says.
“We warn attendees to resist the pressure to sign any contracts or pay any fees when attending these events, without first getting proper independent advice from financial advisers and property investment professionals. Consumers should be wary about any ‘get rich quick’ claims being made.
“Consumer Protection has reviewed advertising material and seminar content and is preparing to issue substantiation notices to ensure promoters are able to justify the claims and representations that they make to members of the public.”
“Promoters will be asked to justify their claims including the financial resources investors need to buy a property, the potential profit they could make within short periods of time and the substance of the course content.”
“In certain instances, people may have rights to a 10 day cooling off period if they signed up for something they were not aware would be offered to them when agreeing to attend the seminar. If people believe they have been pressured into buying something under those circumstances, they can contact Consumer Protection to have their cases reviewed and to ascertain their rights.”