- Key to Australia to pay $1.5M in compensation to 18 consumers
- Mislead consumers by falsely advising land was approved for subdivision
- QLD Gov warns real estate agents Fair Trading is not afraid to prosecute those misleading consumers
The Southport Magistrates Court has ordered a Gold Coast company to pay $1.5 million in compensation to 18 consumers who they scammed through a dodgy apartment scheme.
Key to Australia Pty Ltd and Graham Scarrott, the sole director, pleaded guilty to 18 breaches of the Australian Consumer Law by making false and misleading representations about land.
Between May 2018 and June 2020, Mr Scarrott and Key to Australia marketed residential lots in Pimpama Village, Queensland to people in New Zealand and Victoria as investment opportunities. The company added that the lots had subdivisional approval from the Gold Coast City Council whereby three separate townhouses could be built.
The lots did not have council approval at the time and when he sought approval it was rejected on several occasions by the Council.
The company had also advised consumers they would make between 150% and 300% profit and they could sell the newly zoned lots as three separate lots before settling the full amount of the initial purchase.
Additionally, the consumers had been guaranteed their deposits if the scheme fell through, but the company was unable to fulfil this. In total, over $1.7 million of consumers deposits were used for Mr Scarrott and Key to Australia’s personal use and businesses expenses not related to Pimpama Village.
Shannon Fentiman, the Queensland Attorney-General and Minister for Justice, said the case serves as a reminder that all businesses in the property sector need to be aware of their obligations and to be honest with all consumers.
“Consumers have every right to expect that representations made to them are not false, misleading or deceptive.”
“If real estate agents breach consumer protection laws the OFT (Office of Fair Trading) will not hesitate to investigate them and take appropriate enforcement action if required.”
Shannon Fentiman, QLD Attorney-General
Mr Scarott and the company were jointly charged and are ordered to pay over $1.5 million in compensation along with a $250,000 fine. However, a conviction was not recorded.
