Consumer Affairs Victoria - Lame Response to Corruption Allegation

Published 03 October 11 05:32 PM | Peter Mericka 

OPINION
by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd

In my last blog posting I wrote about Consumer Affairs Victoria's failure to address bribe induced corruption in the real estate and conveyancing industry. I concluded that posting by saying that I had written to Consumer Affairs Victoria (CAV) again, drawing attention to my blog posting, and promising that I would publish CAV's response. The response that I received confirms the moribund state of CAV's policy on corruption in the real estate and conveyancing industries it supposedly regulates.

CAV's failure to act on the corrupting effects of bribes

In my blog posting "Why Corruption Flourishes Under Consumer Affairs Victoria" I outlined the problem of bribe payments made by licensed conveyancers to real estate agents, and how this has a detrimental effect on both industries and on the consumers CAV is charged with protecting.

I had made a formal written complaint to CAV, providing full details including the names of two licensed conveyancers who openly advertise the fact that they offer bribe payments to real estate agents, together with the name of a real estate agent who had admitted to receiving bribe payments, and requesting that the problem be investigated. I received an arrogant and dismissive response which stated,

"In order for Consumer Affairs Victoria to determine if any breach of the relevant legislation has occurred, Consumer Affairs Victoria would require evidence that a conveyancer has not disclosed the payment or receipt of a commission in relation to a conveyancing transaction to his or her client."

CAV completely ignored the role of the real estate agent, and the failure of real estate agents to disclose the bribe payment to the party being referred, and the fact that such failure constitutes a serious criminal offence to which the licensed conveyancer becomes a party.

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Filed under: office of fair trading, oft, consumer affairs victoria, cav, Consumer, consumer advocate, consumer watchdog, consumer advocacy

Comments

# Theo said on October 4, 2011 12:10 PM:

This is really disgusting I do not know how there allowed 2 get away with this and why nobody can do something 2 make them do there job like they should do itg. I am a real estate rep but I do not think the bribe payments R right and they should be stopped and CVA should ge6t there act togehther

# TIM O'DWYER said on October 4, 2011 3:09 PM:

Peter,

The time may have come to dump this whole disgusting and disgraceful mess on the Ombudsman's desk. But don't hold your breath.

# Peter Mericka said on October 4, 2011 4:01 PM:

Hi Tim,

I've previously complained to the Ombudsman and I gained the impression that most of their efforts go into working out ways to avoid becoming involved.

I think we need a journalist, one of the few that is prepared to bit the hand that feeds (see http://abc.com.au/mediawatch/transcripts/s3315985.htm) or a politician who is sufficiently disgusted to attack CAV.

The trouble is that CAV is seen as something of a sacred cow, and it has its own propaganda machine.  The Director of Consumer Affairs is able to write her own self-serving articles for the Herald-Sun newspaper, for example.

I'm like the kid who sees the puffed-up and pompous CAV emperor and declares, "The emperor has no clothes", but at this stage all the onlookers are still worried that they may be called fools for admitting that CAV's imperial ethics cloak is a fake.

# Peter Mericka said on October 4, 2011 5:14 PM:

Hi Theo,

Are you in a position to say whether other real estate agents see it the way you do?  The reason I ask this is that I have been informed that Harcourts real estate agencies are right into the cash-for-clients thing, and so I have raised it on Facebook (I have a large number of Harcourts real estate agents who "Like" my Facebook page at http://www.facebook.com/LawyersRealEstate.

However, every time I have challenged any of them to publicly condemn the practice of referring clients in return for cash, they have gone quiet.  It seems that even those who may think the way you do fear that they will be shunned by their colleagues if they speak out.

# Theo said on October 4, 2011 6:16 PM:

I know whaqt your talking about and I will only say your not wrong

# Angry Man said on October 5, 2011 9:08 AM:

You must be a member of the law society.  It would be in the interests of all its members to stop this wicked business.  You should report this to the law society.

# Peter Mericka said on October 5, 2011 9:23 AM:

Hi Angry Man,

My law society is the Law Institute of Victoria (LIV), and the members of the LIV most affected by this problem are also likely to be participants (for example, see http://reic.com.au/blogs/australian_real_estate_blog/archive/2007/08/03/richard-wood-solicitors-free-movie-tickets.aspx)

The LIV knows that if it does anything to rock the real estate industry boat a large number of its own members will fall overboard.

# Corporate Housing said on October 6, 2011 10:43 AM:

Corruption should never be tolerated and it would be important to make sure that violators will be held liable for their acts.

# George Rousos said on October 6, 2011 12:08 PM:

Peter, Mr Baillieu was quoted saying in September 2009, that Victoria needed an independent broad-based anti-corruption commission.

http://news.smh.com.au/breaking-news-national/no-need-for-icac-in-victoria-brumby-20090916-frjx.html

You should get in contact with him to see what is happening on that front !

# Peter Mericka said on October 6, 2011 12:20 PM:

Yes George, this certainly highlights the need for an ICAC in Victoria.

I'll wait for CAV's response to this blog posting, and in the light of that consider a request that corruption in the real estate/conveyancing industries be first on the list of corruption problems to be investigated by the new body.

# Raheja Revanta said on October 12, 2011 7:15 AM:

Hello i really like your blog post about corrupt goings on at consumer affairs but you do not explain why this gov body will not act on this problem

# Peter Mericka said on October 12, 2011 9:00 AM:

Hi Raheja,

My guess as to why Consumer Affairs Victoria (CAV) so steadfastly refuses to act on this corrupt conduct, or even to acknowledge the problem, is that they fear the repercussions.

If a proper investigation is carried out it will inevitably expose a great deal of serious criminal conduct and attract unwanted attention to the way CAV regulates real estate agents pursuant to the Estate Agents Act and licensed conveyancer pursuant to the Conveyancers Act.  It may even expose corrupt practices within CAV itself (I have personally observed CAV's unwritten policy of selective enforcement of provisions of the Estate Agents Act).

CAV also has conflict of interests problems, insofar as an investigation into licensed conveyancers who offer bribes will lead to an investigation into the real estate agents who receive them.  This would necessarily involve those who administer the Conveyancers Act making allegations against those who administer the Estate Agents Act, and CAV doesn't want domestic problems of this nature being exposed.

So, my view is that CAV finds it easier to ignore and resist calls to deal with corruption than to deal with the unwanted consequences and questions that an investigation would certainly generate.

# iphone 5 said on October 17, 2011 4:33 AM:

I would like to thnk consjumer affairs is listening to this but there is no reply from them unless they did reply to your letter and you have not uploaded. Genuinely giving both sides is very inportant so I hope you will let them reply.

# Peter Mericka said on October 17, 2011 7:41 AM:

Hi iphone5,

I have heard nothing further from CAV.  I suspect that they are now coy about communicating in writing, as they position is quite untenable - if they act on this form of corruption it will be because I have forced them to do so by having exposed their arrogance and ineptitude, and if they continue to refuse they maintain their appearance of arrogance and ineptitude.

Perhaps they feel that staying silent is the safest option for them.

Be assured though, if CAV do reply to my most recent letter, I will publish their response.

# Ft said on October 19, 2011 12:39 AM:

Real estate companies use unlicensed sales people as the front for numerous crooked deals eg intentionally misrepresenting what is being sold, altering the terms and condition of a sale on contracts and seeking money or favors in kind for referrals to other businesses involved in the property purchase or development cycle.

The principals of these real estate companies being licensed agents are practiced in denying blame or being responsible for the conduct of their staff.