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Case Study 3

Heart attacks follow harassment from debt collectors

In another case with tragic consequences, Barbara, an elderly woman, suffered heart attacks, mild strokes and serious chest infections after debt collectors began pursuing her for money.

Barbara was quoted a likely selling price of $180,000 (negotiations above $170,000) before signing an agency agreement.

The agency then quoted a likely selling price of $160,000 (bidding to start at $145,000) before Barbara signed the agency’s Exclusive Auction Authority.

Barbara said the agent told her twice that no fees or charges would be payable to the agency unless the property was "sold". This was despite the "fine print" contained within the contract which states:

The Vendor is obliged to pay the Agent -

(a) the Marketing Expenses incurred during the currency of the Agreement whether or not a sale takes place.

The agency failed to sell the property at auction and was unsuccessful in finding a buyer before the listing agreement expired. However, the agency forwarded Barbara invoices for outstanding advertising expenditure totalling $1,009. Later the agency engaged the services of debt collectors and initiated legal action against her for $1,565.61 including court costs.

Barbara contacted the HHPF who wrote to the agency. The letter says: "On the information conveyed to us by the property owner and on advice received by us, it appears there has been unethical conduct and also breaches of the Trade Practices Act."

"Your agency was aware the property owner is an elderly pensioner who suffers from serious medical aliments, yet it failed to ensure the property owner was able to read and understand the written agreements (particularly the "fine print") which your salesperson encouraged her to sign. She did so only because of his verbal commitment: "If we can’t sell the property, we won’t charge you any fees or advertising costs’...The conduct of your agency is ethically reprehensible."

Barbara was due in court in July 2002 regarding the outstanding debt. The HHPF arranged for a lawyer to represent her. However, the court case was postponed and it now appears that the agent has withdrawn the action.

Homeseller sued for marketing fees for unsold property
Agency appointment in dispute

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