Retirement village in Australia: Residents vulnerable to exploitation
Underfunded consumer affairs bodies and a mishmash of legislation leave residents in the nation’s retirement villages vulnerable to exploitation. A new investigation has found that residents slip through the regulatory cracks.
ABC's Four Corners and Fairfax Media have conducted a joint investigation into retirement village company Aveo. They learned about the lack of village regulation. Recommendations and reforms that came out of an inquiry into the sector a year ago were reportedly not implemented.
The joint investigation involved some current and former residents, their family members and lawyers as well as former Aveo staff and lobby groups. The investigation found questionable business practices. Consumer Affairs Victoria and NSW Fair Trading, the bodies supposed to protect the residents, are believed to not possess enough powers. Therese Toohey's father Rod Bourke, for instance, had trouble in selling his unit at the Aveo Mountain View retirement village until he passed away.
'Great game they play'
According to Toohey, she sent an email to Aveo asking how a unit that was worth $165,000 is now worth $119,000. She was wondering how a unit can fall back in price so much. Toohey will get $81,000 after fees and other fees. She opted not to sell.
“When we get older, we get vulnerable, our voice becomes weaker and people just don't listen and don't pay attention, then the children are busy and just want their parents to be happy," ABC quotes her as saying. Toohey added that it is a “great game they play.”
Based on a statement, if a unit is not sold for six years, it can mean the resident is not willing to meet the market. Some residents feel powerless.
In 2017, a report called Older People and the Law was released following a federal parliamentary inquiry into the sector. It listed some recommendations that were not implemented.
One of the recommendations is that the Australian Competition and Consumer Commission (ACCC) must look at exit fees to see if they have to be abolished. "The committee believes that the ACCC, in consultation with its state and territory fair trading colleagues, should be playing a stronger role in monitoring consumer protection for retirement village residents," the report read.
Earlier this year, the inquiry recommended training lawyers to understand retirement contracts to dispute resolution mechanisms for retirees. But for Consumer Action Law Centre's Gerard Brody, regulators and legislators keep on “passing the buck.”
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