Under scrutiny: How far does the property media industry go to protect their readers?By Stephen Taylor and Jennifer Duke
Thursday, 10 October 2013
We’ve all seen it on TV: the current affairs show crew swoops, industry expert and disgruntled former client in tow, to confront the miscreant. He looks up, caught unawares, and does some fast thinking: to run and hide – hoping to avoid the impending shame - or stand and face the music, try to bluff it out, justify his case and clear his name.
It’s a scene played out almost every week on our major quasi-news programs.
And, just like this, last Friday night’s Today Tonight program exposed building services company, Property Secrets, for taking alleged undisclosed kickbacks. Reporter David Eccleston, and consumer advocate Neil Jenman, claimed the director of the company, Paul Giezekamp, was taking kickbacks from builders that he was not disclosing to clients, and inflating fees.
There were also claims Property Secrets was warned in 2010 by the Fair Trading department over taking undisclosed commissions.
These claims may or may not be true, and Giezekamp has his lawyers looking into his legal options. But what is true is that Property Secrets will be suspended by Property Investment Professionals of Australia (PIPA) pending further investigation. This leaves us asking whether other companies should be taking action to protect their consumers.
But, where does this leave the publishers of well known property magazines and organisers of trade shows who effectively – but presumably unknowingly - promote their clients no matter their ethics? Do media outlets’ advertising departments mind that display ads in their pages may come from clients whose shoddy practises cause untold harm to innocent victims – like those featured on Today Tonight?
We assume that they do – but it’s not easy to get verification.
Property Observer set out to ask three of Australia’s biggest property-focused publishers what they did to vet or scrutinise their advertisers so as to safeguard their readers, and how they may react to any allegations about an advertiser. The results were disheartening, with two saying that well placed staff were ‘’in meetings’’ when our reporter called over two days.
No one at Your Investment Property (YIP) magazine would comment. At Smart Property Investment magazine, the following one-line was sent by publisher Andy Scott in response to a chain of emails and phone calls: "As you’re aware Smart Property Investment (SPI) is focused on delivering factual, informative and timely information to property investors. We’re in the process now of gathering content to report to the market on this particular issue and will publish information this week offering insights for our readers."
It was crucial to this story that SPI was given an opportunity to comment, not least because company director, Phillip Tarrant, sits on the board of PIPA. Unfortunately, mentioning this point to them did not help elicit a response and a chain of emails went unanswered. We'll be interested to read these insights over the next day and a half.
Currently, Property Secrets advertises with both of these titles, inlcuding the most recent editions of the investment titles, in the prominent back page position. We stress that these would have been published before the Today Tonight story was aired.
We don’t set out to demonise them for having these advertisements in this issue of their magazines, and certainly we’re still waiting for more information on what is occurring around Property Secrets ourselves.
What, in fact, we were interested in was their approach to advertisements in the next magazines that they’re currently putting together, and what stage it needs to get to for advertising to be pulled. Clearly, advertising does generate leads and build a brand perception, or advertisers would not pay money for these positions. As a result, it leaves many in the industry in a position of a substantial power.
The two main questions we had been keen to receive answers to from the magazines included:
What is the process undertaken to check advertisers’ credentials/ethics?
What will happen in response to the allegations – will advertising be pulled until further evidence comes to light, or until the situation is cleared up?
The advertising manager of Australian Property Investor (API) magazine, Laurie O’Brien, was more forthcoming with information. This may be because, currently, Property Secrets does not advertise with the title. However, they have had Property Secrets as an advertiser in the past.
"API magazine doesn’t have a written policy but accepts advertising in good faith from companies that they expect operate in the best interests of their customers.
"We’d prefer to avoid companies that may have reputations for questionable business practices. At the end of the day I don’t want to have readers contacting me saying, ‘I’ve been ripped off by one of your advertisers’, so, of course, we aim to run adverts by reputable firms.
"We don’t have a crystal ball. There have been companies who advertised with us - and also probably in major magazines, metropolitan newspapers and other media – who went broke and hurt a lot of people and we certainly don’t want to be a part of that.
"If we know companies have a bad track record or have been shown to have deceived customers we avoid accepting their advertising – but it’s very hard to know first up.
"It would be different if we chased their business after we knew they had been cheating or misleading customers.
"I take advertisements in good faith but if I know a company is disreputable I stand clear."
Of course, this article wouldn’t be fair without shining the light back on ourselves as a publication. With this in mind, we asked our own advertising department about our ‘checks and balances’ and what their approach would be if something came to light about an advertiser.
"If a client was proven to be operating in a manner that was adverse to the best interests of the consumer than we would refuse to accept their advertising, as per our advertising terms and conditions," said Private Media’s (publisher of Property Observer) publishing director Marina Go.
She also pointed us to the company’s advertising Terms and Conditions.
The following clauses in particular stand out: ‘By submitting advertising material to us or authorising or approving the publication of advertising material by us on your behalf, you warrant that the advertising material complies with all relevant laws and regulations and that its publication will not give rise to any claims or liabilities against us, our partners, our directors, employees or agents.
‘Without limiting the above, you warrant that the advertising material submitted, authorised or approved by you does not breach or infringe the Trade Practices Act (Cth), the Fair Trading Acts of relevant states of Australia or equivalent or other sale of goods legislation; any copyright, trade mark, obligation of confidentiality or other personal or proprietary rights; any law of defamation, obscenity or contempt of any court, tribunal or royal commission; State or Commonwealth anti-discrimination legislation; the Privacy Act (Cth); or any other law (including but not limited to any common law, statute, delegated legislation, rule and ordinance of the Commonwealth or any state or territory).
This means controversial advertising would get pulled, assuming that there were substantial allegations against the company, and not just gossip, they clarified to us in an email.
It can be a difficult time for publishers trying to discern between the two.
We also approached popular expo, the Home Buyer and Property Investor Show, to ask them about their approach to curating and who is able to have a stand at the show. Clearly, their responsibilities here are just as crucial with hundreds of 'mum and dad' investors and home buyers wandering through their doors all across Australia on an annual basis.
We were unable to be provided a comment for the article as their spokesperson is interstate, however we were provided some useful clarification. From a legal stand point, show organisers can’t appear to discriminate or be restrictive against a potential client. They often seek advice from Property Investment Professionals of Australia (PIPA) on a potential client’s bona fides.
PIPA's membership requirements are listed here.
Speaking to Property Observer, the Real Estate Buyer's Association of Australia (REBAA) president Jacque Parker said that any time buyer's agents do the wrong thing it is disappointing for the industry and does make things more difficult to present the best information to consumers.
One way they vet members is to ask for endorsement by two current members, provide one year of 'associate' membership and put in place minimum standards. These include a code of ethics, that the member is a licensed real estate agent, and that they have indemnity insurance.
Parker noted that they had knocked back membership previously, but that to her knowledge Giezekamp had never sought membership with REBAA. This is the REBAA's membership application.
The most common reasons for knocking back membership applications included that they didn't have the right insurance and that the majority of their business did not operate as a buyer's agency.
"The best advice I can give is to call the Office of Fair Trading and find out if any complaints have been made against them," Parker said.
At the end of the day, readers will always be urged to undertake their own due diligence over any expert they use. This is regardless of whether they are advertising or have been quoted in the media, or if they are associated with a certain body.
Read more:
http://www.propertyobserver.com.au/news/under-scrutiny-how-far-does-the-property-media-industry-go-to-protect-their-readers/2013100965608