A real estate agency in Melbourne's east has been fined a record $880,000 after underquoting on 22 properties.
The Federal Court found Fletcher and Parker (Balwyn) breached consumer law in 2015 by falsely advertising the price of properties, engaging in misleading or deceptive conduct, and by making "false or misleading representations about the sale of land".
The court stated the realtor's offices in Blackburn and Canterbury knew houses would sell for much more than the advertised price, and the scheme had gone on for a number of months.
The agents would use the false advertising in magazines, flyers and email responses in the hope of luring more potential buyers.
The whopping fine set a new benchmark for underquoting in Melbourne's real estate market, and came only 10 days after Hocking Stewart Doncaster were fined $160,000 for underquoting nine houses for sale in Melbourne's north-eastern suburbs.
Consumer Affairs Victoria said the courts had handed down more than $1 million in penalties in the past fortnight.
Fletcher and Parker was caught out after a taskforce from Consumer Affairs Victoria looked into sales and the corresponding advertising.
Company chief executive Bradley Brown apologised for the "unacceptable conduct by a few members of our team".
"This type of behaviour went completely against everything we stand for as a business and how we treat our customers," he said in a statement.
"Victorian homebuyers … don't need underquoting and we won't tolerate it either."
Mr Brown said as soon as the incidents were identified the company introduced a "stringent live audit" and random spot check program.
Underquoting fines 'give homebuyers confidence'
The Minister for Consumer Affairs, Marlene Kairouz, said the department would continue to crackdown on the misleading behaviour.
"Underquoting is dishonest, misleading and against the law — and today's decision shows that if you do it, you'll pay the price," she said.
She said the practice preyed on hopeful homebuyers, and the increasing number of fines sent a clear message.
"This outcome will give homebuyers the confidence that this dodgy practice is being stamped out," she said.
The eastern suburbs agency must also implement a program to educate its agents about their legal obligations and appoint a compliance officer to ensure that the program is effectively maintained.
As part of the punishment the company must acknowledge their contraventions in the local newspaper where they advertise, on property websites and display a notice in their office for six months.
The president of the Real Estate Institute of Victoria (REIV), Richard Simpson, said the Fletcher and Parker case related to offences that occurred before new underquoting laws came into effect in May last year.
He said the new legislation had provided greater consistency in the way properties were quoted across Victoria.
Mr Simpson said the REIV welcomed the prosecution of estate agents who deliberately flouted the law.
