Dodgy property scam costs Gold Coast agent $1.75m
A total of $1.5 million in compensation is set to be paid out to affected customers alongside a $250,000 fine after a property company was exposed for running a dodgy investment scam.
Following an investigation and charges by Queensland’s Office of Fair Trading, Key to Australia Pty Ltd and sole director Graham Scarrott have pled guilty to 18 breaches of Australian Consumer Law for making false and misleading representations about the land.
The Office of Fair Trading said that over a period of time covering 9 May 2018 to 12 June 2020, Mr Scarrott and Key to Australia misled property investors by telling them that a set of residential housing lots had permission to be subdivided by the local Gold Coast City Council (GCCC) when this was not the case.
As part of the scheme, customers were told they would make between a 150 per cent and 300 per cent return on a property investment opportunity located in Pimpama Village by selling off their newly zoned, subdividable property investment before repaying the full amount of the initial investment.
According to Queensland’s Office of Fair Trading, Key to Australia and Mr Scarott also assured customers and investors a full refund of their deposit if the scheme did not go ahead. However, when Mr Scarott eventually sought approval to subdivide the lots, the request to subdivide the lots was rejected by the GCCC.
Instead of refunding the deposits of customers as promised, Queensland’s Office of Fair Trading said that Mr Scarrott and Key to Australia had used a total of $1,712,244 for personal and business expenses unrelated to the Pimpama Village investment scheme.
Mr Scarrott and Key to Australia have been charged a fine of $250,000 and ordered to pay $1,573,601.9 in compensation.
“This matter and its outcome are a reminder to all businesses that operate in the property sector of their obligations and duty to act honestly with consumers,” Queensland Attorney-General and Minister for Justice Shannon Fentiman said.
“Consumers have every right to expect that representations made to them are not false, misleading or deceptive.”
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