Dealing with consumer demand
Demand from consumers has stretched Fund resources. It has forced the Fund to adopt an almost military-style
approach to handling those hurt by property scams.
Neil Jenman explains: "There were so many wounded in World War I that medical staff couldn’t
cope. So they split the injured into three categories - those mortally wounded; those not seriously wounded;
and those seriously hurt who could be saved provided they received immediate care. The medics focussed
on the third group.
"Because of the volume of victims from the property industry, we have had to tailor our responses
in a similar way."
Some victims have lost money and will never recover it - people who paid too much for property or who
are victims of scams run by companies which no longer exist. In such cases the Fund often can do little
more than warn about the dangers or alert the public when an identified offender re-surfaces.
Others have been hurt but not severely - such as those who wasted money pursuing a property outside their
price range after being under-quoted by an agent.
The third category comprises consumers who have lost large sums and have some prospects of recovering
their money, if they receive assistance - or those who are about to lose money but can be saved if the
Due to its limited and stretched resources, the Fund has been forced to concentrate on this third category
Fund employee David Reardon says the volume of consumer inquiry demands each matter be assessed in terms
|the reliability of the complainant,
|the chances of achieving a favourable outcome, and
|the general benefit to real estate consumers from any action.
The Fund’s financial resources are stretched and more revenue is needed to cope with the volume
of work. The Fund’s income comes primarily from contributions from agents accredited by The Jenman
Group. Initially, it was anticipated that agents would contribute two average selling fees each year.
As can be seen from the Financial Reports, contributions have been far below this figure. It is not easy
to ask agents to contribute to a cause that does not lead to profits for them and so we have not placed
heavy demands upon them. We are thankful for any assistance. We may ask for more contributions in the
Fund work in 2003 and 2004 has consumed the time of six key people: Neil Jenman, Craig Lean, Jeff Dalrymple,
David Reardon, Denise Brailey and Reiden Jenman.
In addition to sponsoring RECA (which provides the services of Denise Brailey), the Fund employed Craig
Lean and Jeff Dalrymple, paid 75% of David Reardon’s wages and 50% of Neil Jenman’s wages.
The Fund paid a 5% management fee to the Jenman Group.
Denise Brailey and RECA
Denise Brailey works mostly alone in her capacity as RECA President, but keeps in regular contact with
Neil Jenman and Fund staff and members.
In the last three months of 2003, Denise reported that RECA received over 4,000 inquiries from real estate
consumers. "These people live in every state and territory," Denise says. "We are uncovering
massive fraud in Australia on a scale never experienced in this country."
Her objective is to see consumer protection become "a major agenda" for all state and federal
governments. "Until that day arrives, many more innocent people will lose millions of dollars between
them to property spruikers and their professional cohorts," Denise says.
"There are thousands of victims who have yet to discover they are victims of fraud.
"The collapse of these massive conspirators will assuredly
occur. The fact that we are there at the cutting edge, exposing
them, while assisting aggrieved consumers, is the best use of
the Fund. My commitment to this agenda is evidenced by my move
Craig Lean, a former policeman who worked as an investigator
and researcher for the Fund, has fielded inquiries from hundreds
of consumers and has conducted scores of investigations.
His work has encompassed cases of two-tier marketing, victims
of misleading and deceptive conduct and assisting consumers
to obtain refunds from get-rich-quick seminar operations.
His role has changed from mostly investigative work to a research
role. This has included attending numerous seminars run by
In June 2004, Craig ceased employment with the Fund and is
now a contracted researcher.
Many of Craig’s cases involved victims of Henry Kaye,
the National Investment Institute (NII) and Australian Finance
Direct (AFD). Craig has helped many Kaye course participants
secure release from repayment obligations to NII and AFD.
He has assisted the Fund’s research into Kaye by preparing
flow charts depicting the web of inter-connected companies
in the Kaye empire.
Craig has also mapped other organisations and has prepared
detailed flow charts on the activities of scores of spruikers
and their companies. His skill in this area is first-class.
Craig has provided vast input to journalists working on stories
about property fraud. His research work over several months
was a major contribution into many of the leading property
stories, especially those concerning the now defunct Kaye
David Reardon, a former estate agent, is often the first point of contact for consumers who approach the
Fund. He handles hundreds of inquiries each month.
Inquiries fall into four broad categories:
|sellers seeking general advice
|sellers having problems with agents
|buyers seeking general advice.
|consumers inquiring about wealth creation seminars or property investment
|Investors who feel they have been the victims of deceit.
Many matters can be handled quickly with a phone call or email. "Many consumers comment favourably
on the rapid response time," David says.
Some matters, however, require investigation and information gathering. David often speaks directly to
the offending company or person to encourage "an amicable outcome".
When complaints involved what appeared to be a serious breach of
the law, David conferred with the Fund’s legal counsel
Jeff Dalrymple to determine whether there was a realistic chance
of success through legal action.
As the Fund’s legal counsel, Jeff Dalrymple was involved
in the management of numerous consumer complaints. These covered
the full spectrum of real estate agency operations, including
over-quoting to sellers, under-quoting in advertising, marketing
expense claims, commission claims, disputes over the agency
authority, under-selling property and wraps contracts.
Action has often involved direct legal assistance and advice,
with positive outcomes for many consumers. Some have escaped
the need to pay advertising expenses claimed by the agency
or have had a disputed agency agreement dissolved following
Some issues have involved allegations of two-tier marketing.
Consumers have sometimes opted to join one of a number of
test cases in the Brisbane District Court. Over 700 consumers
are currently involved in such cases via law firms in Brisbane
Jeff’s focus since mid 2003 has been consumers who have
lost money to property investment courses and get-rich-quick
He says of the year’s work: "Most complainants
are extremely grateful for the assistance provided by the
Fund team. Most consent to the publication of their individual
stories to benefit others."
In June 2004, Jeffrey Dalrymple ceased to be employed by the
Fund. Legal work is now handled by law firms in Sydney, Melbourne
Influence on improved consumer
Most state governments are rewriting their real estate laws.
The combined resources of the Fund and its supporters has
made a contribution to these changes.
The Jenman website, the "Inside Secrets" events
and media appearances by Neil Jenman and Denise Brailey have
raised awareness of many consumer issues. Neil has communicated
with ministers and regulators to lobby for changes and has
written several formal submissions which seem to have influenced
the framing of new laws.
The Property Stock and Business Agents Act became law in New
South Wales in September 2003. Neil’s recommendations
were presented in two meetings with the (then) Minister for
Fair Trading, John Watkins, and in a formal submission before
the laws were drafted. Many of his recommendations, including
changes to auction laws, appear to have been included.
There were similar outcomes in Victoria, where amendments
to the Estate Agents Act and the Sale of Land Act took effect
in February 2004. Neil Jenman met the (then) Minister for
Consumer Affairs, Christine Campbell, and provided a formal
submission which helped draft laws banning kickbacks, price
mis-quotes and some of the most notorious auction practices.
The State Government in South Australia has signalled plans
to bring in new real estate laws in 2004, following an inquiry
instigated by MP John Rau. Neil Jenman has spoken several
times to Mr Rau and submitted written recommendations, which
are now reflected in the draft laws.
Queensland, which implemented the Property Agents and Motor
Dealers Act in 2001, has since reviewed the new laws. Neil
has sent two formal submissions to the Queensland regulatory
More recently, the State Government in Tasmania announced
it will change its real estate legislation. Fund personnel
have communicated with Tasmania’s Director of Consumer
Affairs and Fair Trading, Roy Ormerod, to comment on the new
laws. The Auctioneers and Real Estate Agents Bill was expected
to become law in June 2004. For some reason it has now been
delayed until at least 2005.
While the Fund has been a critic of many real estate practices,
much of the credit for raising public awareness goes to journalists
who pursued several issues.
Tina Perinotto of the Australian Financial Review first
wrote about Henry Kaye in 2001 and has written numerous articles
since. Maurice Dunlevy at The Australian and John
Garnaut of the Sydney Morning Herald have also reported
on many of the key issues.
Channel 7 has included many real estate segments on Today
Tonight while ABC-TV’s Four Corners created
considerable national impact in April 2003 with its "Tall
Stories" program, which focussed attention on a number
of major property suspects, most of whom have since been the
focus of regulatory attention.
In April 2004, after weeks of intensive research and investigation,
Channel Nine’s 60 Minutes aired a story called
The Sting. Reporter Liz Hayes introduced the program
with these words, "It's the biggest property scam ever
and you're about to see exactly how it works, a con so clever
yet so simple, it trapped 250,000 Australians — average
Australians, ordinary mums and dads. For them, there was no
boom, just the bust. Their only mistake — they were
too trusting. And all along the line, that trust was betrayed,
often by the very people who should have been on their side
— the home lenders, the lawyers and the banks. The appalling
thing is, they all kept quiet, then simply pocketed their
share of the proceeds — hundreds of millions of dollars."
Following the 60 Minutes story, Neil Jenman received
more than 800 emails, many from consumers who needed urgent
assistance. Hundreds of people also telephoned with stories
of how they, too, had been caught in a property scam. One
of the property rogues featured in the 60 Minutes
story was a convicted felon. Threats were received from this
man prior to the airing of the story – and they continue
to this day (late 2004).
In October 2004, the Fund was contacted by a family who had
unknowingly bought a home in which a multiple murder had taken
place. The family stood to lose at least $80,000 – being
their ten per cent deposit – as they did not wish to
proceed with the purchase. Despite complaining to the agent
who sold them the home and to the regulatory authorities,
the family was unable to obtain help. The basic message was,
"Too bad, you have signed and there has been no law broken
as agents are not obligated to reveal the history of a home."
Neil Jenman wrote an article about the plight of this family.
Their story then made national headlines. It was on the front
page of The Sydney Morning Herald (October 5) and
the second story in the nightly news bulletins as well as
being the lead story on Channel Seven’s Today Tonight
program. After two weeks of intense publicity, the family
was compensated for their lost deposit of $80,000 and indemnified
against any future claims by the vendors. The NSW Government
announced it was considering changing the disclosure laws
to prevent other families being caught in a similar manner.
On October 28, the family sent the following message to Reiden
I am so happy with the ending. I remember when we first
discovered the history of the house, we asked for help
from everywhere, even Fair Trading, but the answer was
very negative. We felt so fearful, and hopeless, When
a friend gave us Neil's number and website two weeks after,
honestly we were not sure that we could trust Neil. Why
would he help a stranger without any conditions? Will
we fall into a even bigger trap? But after met you, I
know you are really above-board people. You helped us
from your heart without any thought of payment. You really
cared about us and shared our worries.
My parents are very grateful for what you did and they
want to contribute some money to the Homesellers &
Homebuyers Protection Fund Limited, We are hoping this
can help even more people when they feel hopeless. Thank
you once more.
Without the assistance and support of the media, this family
had almost no chance of being released from their nightmare
"We shouldn’t have to do this."
The Fund has filled a gap in consumer protection. It’s
a gap which should not exist.
Journalist John Garnaut wrote in The Sydney Morning Herald
on September 13, 2003: "The get-rich-quick industry
is thriving in the absence of effective regulation, with no
institution assigned specifically to cover it. Industry regulation
hit its low point in August when state and federal consumer
ministers met to blame each other for the regulatory black
While the authorities appeared to pass the buck, the property
rogues make mega-bucks.
Neil Jenman, interviewed on the ABC television program
Lateline about the Fund’s assistance to get-rich-quick
victims, said: "We shouldn’t have to do this."
The activities of two-tier marketers, get-rich-quick spruikers
and others who prey on real estate consumers have been in
the public domain for many years. Con artists have prospered
in the absence of an effective response from the state government
departments and federal authorities whose job it is to protect
Many aggrieved consumers have approached the appropriate government
agencies and been rebuffed.
David Reardon says: "Consumers are commonly ‘fobbed
off’ unless there appears to be a serious case of illegality
which would lead to a conviction. Some government officers
unashamedly advise complainants that owing to budgetary constraints
only grave misbehaviour can be investigated."
Many consumers approach the Fund because of government inaction.
Some consumers have been referred to the Fund by persons who
work in the government departments. While this is flattering,
it is also somewhat farcical.
Neil Jenman says: "The enormity of the work being placed
on the Fund is more than we can cope with. At times, it makes
Fund personnel are in regular contact with people working
within government authorities, many of whom seem frustrated
at their inability to respond effectively to consumer inquiries.
Neil Jenman says: "Many consumers tell us that the staff
at state Fair Trading departments and ASIC and the ACCC have
been sympathetic on a personal level. However, the regulatory
staff often say they don’t have the resources available
nor are they receiving the necessary direction from their
superiors." The Fund has fewer resources.
"The Consumer Credit Legal Centre in Victoria has done
some outstanding work. So, too, has Consumer Affairs Victoria
– and, more recently, the ACCC has taken a strong interest
in the real estate industry. This gives me encouragement."
Clearly, the main responsibility for consumer protection belongs
to senior government officials and politicians, some of whom
seem more interested in protecting themselves than protecting
consumers. With the growing realisation that property consumers
are being ripped off on a massive scale – and with the
fall-out from the property boom growing daily – the
ensuing scandals will be too big for even the most wily politicians
New laws are definitely required – especially in the
provision of financial and investment advice from so-called
"property experts". But lack of new legislation
does not excuse the lack of enforcement of existing laws –
from misleading and deceptive conduct to fraud.
Until federal and state governments take a greater interest
in protecting property consumers and until more offenders
are prosecuted, an increasing number of consumers are likely
to contact the Fund for help.
Where we stand at the start of 2005
The Fund is over-worked and under-funded, but not under-committed.
Neil Jenman now devotes the majority of his time to consumer
protection issues. Neil is able to support consumers thanks
to the commitment of the staff at The Jenman Group who continue
to offer training, advice and support to the real estate industry.
While Neil will continue to offer suggestions to the real
estate industry – and to give talks to those within
the industry who support his stance on ethics and client care
– his real estate training company is being ably-handled
by Gary Pittard and his team at The Jenman Group.
The loyalty and support of agents who continue to use the
services of The Jenman Group is greatly appreciated. Without
their assistance, the Fund could not exist.
The Homesellers and Homebuyers Protection Fund team is now
made up of Neil Jenman, Reiden Jenman and David Reardon. Regular
assistance is sought from Craig Lean for research. Legal advice
is provided by Champion Legal in Sydney, Slater & Gordon
in Melbourne and O’Dwyer & Bradley in Brisbane.
Denise Brailey and RECA provide assistance in handling consumer
Further funding is required in order to engage the services
of more secretarial and research staff. It is hoped that funding
will increase in the year ahead.
The Directors of the Fund thank all those who support our
efforts to protect property consumers.