ASIC Recommendations Against Real Estate Scams

By gotoadmin Apr 27, 2015
Scam Real Estate

You know the old saying – “when something seems to good to be true…it probably is”. Well, it’s never been more applicable when it comes to attractive real estate scams. These are the recommendations of the ASIC to avoid them:

Investment seminars & real estate scams

What are investment seminars & real estate scams?

Some investment seminars may try and convince you to follow high risk investment strategies, such as borrowing huge sums of money to buy property. Others promote investments that involve lending money on for no security—or with other risky terms. While investment advice can be legitimate and beneficial, it is important to look carefully at what an investment scheme or seminar is offering. Attending an expensive seminar or investing in the wrong kind of scheme can be costly mistakes.

You could be invited to an investment seminar in a number of ways—you might receive a letter drop in the mail, see an ad in a newspaper or magazine, or hear about it through word of mouth. The seminar may promise that a motivational speaker, an investment expert or even a self-made millionaire will give you advice on investing.

The seminars and real estate investment schemes make money by charging you attendance fees, by selling you over-priced reports or books and by selling property and investments without letting you get independent advice. They often make misleading or deceptive claims or pressure you to buy into investments that will end up losing you money.

The investments that the seminars offer are often over-valued and you may have to pay fees and commissions that the promoters did not tell you about beforehand. The seminar promoters might offer ‘rent guarantees’ or discounts for ‘buying off the plan’—but these may not deliver the benefits they promise when the total cost of the deal is taken into account.

Some seminars or schemes may even fly you to the property location to view the property. They will try to pressure you into committing to the deal—without giving you time to obtain independent information or advice.

Warning signs

scam warning signs

According to the Australian Competition and Consumer Commission there are numerous warning signs that you can help you determine whether you are being duped, and they include:

  • Advertisements for seminars or real estate investment schemes that promise a ‘risk-free investment’, ‘be a millionaire in three years’ and ‘get-rich-quick’.
  • Promises of above-average returns at little or no risk.
  • The first seminar you are invited to attend may be free, but there are very high fees to attend any further seminars
  • Offers of loans to cover the costs of both the investment and further investment seminars.
  • Investment seminars that offer to teach you ‘secret’ or ‘exclusive’ techniques for building wealth.

Scam Protect

Protect yourself from investment seminars & real estate scams

  • Use your common sense: the offer may be a scam.
  • Remember there are no get-rich-quick schemes: the only people who make money are the scammers.
  • Do not let anyone pressure you into making decisions about money or investments: always get independent financial advice.
  • Remember that family members and friends may try to involve you in a scam without realising that it is a scam: you should seek independent advice (from a lawyer or financial adviser)
  • Be wary of investments promising a high return with little or no risk.
  • Do not open suspicious or unsolicited emails (spam): delete them.
  • NEVER reply to a spam email (even to unsubscribe).
  • If it looks too good to be true—it probably is.

As well as following these specific tips, find out how to protect yourself from all sorts of other scams.

Do your homework

Check with ASIC and the ACCC to see if they have taken any action against the promoters or their schemes (and remember that even if ASIC or the ACCC have not taken any action to date, this does not mean the scheme is safe or legal).

Scammers may offer to fly you interstate to view properties. Before you accept their offer, find out if you must pay for your travel and accommodation if you don’t buy a property.

DO NOT commit to any investment at a seminar—the atmosphere at these events can be quite charged and exciting, but investment decisions should only be made after a lot of thinking, and most importantly, after seeking advice from an independent financial adviser licensed by ASIC


The easiest way to avoid these scams is by not responding to the advertisement for the seminar. If you believe the seminar might be worthwhile, seek independent professional investment advice before deciding to attend.

No investment is risk free, including real estate investments. There can be major costs involved (such as legal fees and stamp duty) and the market can change overnight.

Take your time and make your decision based on independent research and expert advice.

Report them

If you have been approached about a seminar or real estate investment which doesn’t seem right, or if you have invested money and now realise it is a scam, you can report a scam through the SCAMwatch website. You should also spread the word to your friends and family to protect them.


Similar scams:

more real estate scams

Cold calling (investment telemarketing)

Unsolicited phone calls pushing high-return and high-risk investments, often in overseas markets. The callers sound professional but are not licensed in Australia.

Share promotions & ‘hot tips’

Spam email or strange phone messages that urge you to buy shares in a thinly-traded company. The scammers wait until their victims invest before selling their own stock at a profit.

Sports investment scams

Expensive software packages that promise to predict the results of sporting events or share market movements. When they fail to work as promised, refunds are hard to come by.

Superannuation scams

You are offered early access to your superannuation (‘early release’), often through a self-managed super fund. The scammers take a large part of your super for themselves, and put you at risk for accessing your super in an illegal way.

Business opportunity scams

There are a range of scams marketed as business opportunities. They promise success but usually only the promoter makes any money.

Guaranteed employment / income scams

Scammers ‘guarantee’ you a job or certain level of income, tricking you into paying an up-front fee for a ‘business plan’ or materials.

Pyramid schemes

Illegal schemes that always collapse when the supply of victims dries up, leaving nearly everyone involved much worse off.


Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *