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Fraudulent activity just the tip of the iceberg: REINSW

By Stacey Moseley
18 February 2014 | 10 minute read

The Real Estate Institute of New South Wales (REINSW) is calling for more power to prevent fraudulent activity in the real estate industry after a string of agents hit the headlines for all the wrong reasons.

Over the last 12 months NSW Fair Trading alone has prosecuted six real estate agents for trust account fraud.

Just last Friday a Hawkesbury-based director was sentenced to 18-months' jail time for stealing over $300,000 from their company's trust account. Another four Victoria-based agents are also facing jail time and according to REINSW deputy president John Cunningham, this is just the tip of the iceberg.

“The writing is on the wall, we’ve known for a long while that this was a major problem and now we are seeing story after story of agents doing the wrong thing and being prosecuted,” he told Real Estate Business.

“This is not a new problem, the reality is that there are a lot of poorly trained agents running businesses because it is so easy to get a license and there is no mandatory ongoing training.”

According to Mr Cunningham NSW Fair Trading and other similar bodies only have the ability to reprimand agents after they have offended. Instead, the REINSW believes the industry can be more proactive.

“Our proposal, which has been put to NSW minister for Fair Trading Stuart Ayres, will provide a level of accountability and professional oversight that follows the tried and tested approach that prevention is better than cure,” he said.

“NSW Fair Trading, with its recourses, is only able to become involved in the conduct of agents when they have transgressed. REINSW wants to become involved in conduct issues before they become a problem.”

This involvement would take shape as a ‘co-regulation model’, which would see REINSW given the power to force all business owners to complete ongoing business training.

The ultimate goal is to have all offices, old and new, participate in the training, Mr Cunningham explained.

Mr Cunningham told Real Estate Business there is already a number of industries who proactively address the issue of fraud.

“The Royal Institution of Chartered Surveyors and the Law Society of NSW are two good examples of industries who are successfully using this co-regulation model,” he explained.

Fraudulent activity just the tip of the iceberg: REINSW
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