Rick Otton and his $1 housing scheme We Buy Houses taken to court by ACCC

Posted by Henry | BUYING PROPERTY,HOME LOANS,HOME OWNERSHIP | Monday 16 March 2015 8:59 am

Has Rick Otton got a winner for home buyers & sellers here or is the ACCC right in their stand against him??

The consumer watchdog has launched a legal challenge to shut down a $1 home scheme that allegedly targets low-income customers.

The consumer watchdog has launched a legal challenge to shut down a $1 home scheme that allegedly targets low-income customers. Photo: webuyhouses.com.au

The consumer watchdog has launched a legal challenge to shut down a real estate scheme that allegedly targets vulnerable customers by outlining how they can buy a home for $1.

Property spruiking company We Buy Houses and its boss Rick Otton, a self-declared property “mentor and investor”, have been investigated by the Australian Competition and Consumer Commission for seminars and programs that preach wealth creation through housing investment.

The ACCC today announced it will confront We Buy Houses and Otton, the director, in Sydney’s Federal Court. A preliminary hearing is penciled in for early next month.

Mr Otton, a Sydney-based investment promoter, last year agreed to stop spruiking his rent-to-buy scheme in Western Australia for two years, but is operating in other states and territories.

The regulator is seeking to fine the company, force it to run corrective advertising and disqualify Otton from being the director of a company.

The ACCC alleges We Buy Houses breached consumer law with statements made in its advertising, on websites, and at customer seminars and so-called “boot camps”.

House hunters and wannabe investors paying to attend the programs were coached in strategies that pledged, according to the ACCC’s claim, to help them to buy a house for $1.

Other alleged teachings refered to in documents lodged with the Federal Court include buying real estate using little or none of their own money, and building property portfolios without a bank loan or investing their own cash.

Attending a boot camp costs from $2,997, and up to about $17,000 to be part of the mentoring program, according to the ACCC.

ACCC chairman Rod Sims said the watchdog had concerns about the financial position of people whom the adverting targets.

“The ACCC is concerned that the strategies promoted by We Buy Houses and Mr Otton target vulnerable consumers who don’t qualify for bank loans or who are having difficulties meeting their mortgage repayments,” Mr Sims said.

However, Mr Otton said he will vigorously fight the court action.

He said the title of his book, We Buy Houses For A Dollar, had been incorrectly interpreted by the ACCC.

“The ACCC is taking a literal interpretation of the title, it’s like saying the book Fifty Shades of Grey is misleading because it’s not about paint colours, or that David Niven’s memoirs, The Moon’s A Balloon, isn’t about the moon,” Mr Otton said in a statement.

“Or that a sign for a weekend garage sale is misleading because the garage is not actually for sale. Where does it stop?”

Mr Otton said his strategies are consistent with Federal Government advice to home owners.

“It seems that the ACCC thinks the public are fools, that they will take this title literally and think they only need a dollar to buy a house,” he said.

“It’s a sad day when the ACCC thinks the Australian public is that foolish that they don’t understand that the dollar is just the start of the process.

“My book gives people alternate ways of owing their own home, by changing how they can creatively buy and sell property.”

Mr Otton’s personal website says he is on a mission “to transform the way people buy and sell property to empower them with the knowledge that there is another way” and claims he is the “pioneer of creative property investing”.

In a statement, the ACCC said it will allege the scheme doesn’t allow house buyers to secure a property for $1, but rather, turns them a “middleman to facilitate property transactions between third-party sellers and third-party buyers”.

NSW Fair Trading and Western Australia’s Consumer Protection body have helped with the case, which begins with a directions hearing on April 1.

ooo

Henry Sapiecha

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