An article by Jonathan Barrett – AFR
Asking prices for houses in the Pilbara town of Port Hedland have dropped 40 per cent, but a local agent tells investors “demand for new dwellings will continue unabated”. In Collins Street, Melbourne, a commercial agent reckons buying the office he is selling represents the “best investment” in the city. Both statements are probably untrue, but are they illegal?
Stephen Meagher, from the West Australian government’s Consumer Protection department, said the law discerned between subjective statements and those that could be quantified.
This means that the local fast-food shop advertising “the best hamburger in Brisbane” would get away with it because the brag is subjective and almost impossible to test. The legal term for such a subjective statement is “puffery”.
Similarly, a real estate agent that claims to be “Sydney’s best” would probably be safe under the Australian Consumer Law. But if the agent said it was the “number one selling agent”, then it had made a claim that could be quantified, and it would need to back it up with evidence.
Consumer advocate Neil Jenman said he was amazed at some of the mischief he saw in the property sector. “My daughter went to a home open, where the advertising pictures had showed it had a brushwood fence. There was no brushwood fence. It had been Photoshopped,” he said.
While there appear to be clear examples of agents making untrue – and quantifiable – claims, prosecution isn’t necessarily straightforward.
Consumer Protection in WA prosecuted a case where a Bunbury property was advertised for between $1.5 million and $2.5 million, even though the owner had said he would not accept an offer below $2.2 million. The prosecution failed because it didn’t prove the target audience – buyers – were misled.
So, do the Port Hedland and Melbourne claims break consumer law?
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