ACCC's Samuel nabs Kaye

Property spruiker Henry Kaye faces the Federal Court later this month after the ACCC yesterday instituted legal proceedings against him for alleged misleading and deceptive conduct over his latest get rich quick 'millionaires' promotion. As reported exclusively in yesterday’s propertyreview.com.au, ACCC chairman Graeme Samuel warned Australia’s property spruikers and two-tier marketers that he was about to crack down hard on their deceptive antics.

Just hours after propertyreview.com.au launched its first edition, the ACCC swooped on Kaye’s Melbourne offices slapping a writ on Kaye and his property education firm National Investment Institute.

Samuel, who has only been in the chair of the ACCC for a short time after taking over from the high profile Prof. Alan Fels, showed he is totally committed to cleaning up the myriad of property scams presently operating in Australia.

Kaye had been claiming in a national advertising campaign that he could “make five ordinary Australian’s into property millionaires in just six months, using no money down, no debts and no equity”.

Kaye’s minders have already removed his website www.henrykaye.com.au.

ACCC alleges that in advertisements for seminars in newspapers and on the Internet Kaye and NII claimed that:

• they could turn ordinary Australians into millionaires with no money down, no equity, no debt and a price protection guarantee that if the market were to go down they would not lose their money by teaching them and by them following Mr Kaye’s property investment strategies;

• the strategies do not enable ordinary Australians to become millionaires;

• that neither Mr Kaye nor NII had reasonable grounds for claims that an ordinary Australian would, if they followed Mr Kaye’s strategies, become a millionaire; and

• that neither Kaye nor NII had reasonable grounds for claims that five volunteers provided training by Mr Kaye would become property millionaires in six months without using their own money or taking on a risk of debt.

The ACCC further alleges that Mr Kaye aided, abetted, counselled or procured; and was directly or indirectly knowingly concerned or a party to NII’s alleged misleading and deceptive conduct in promoting its Investment Mastery Program.

It also says Kaye and NII claimed that a thousand ordinary people who signed up and paid to be taught property investment strategies by Mr Kaye would become property millionaires within 12 months when neither Mr Kaye or NII had reasonable grounds for making the representation.

The ACCC alleges that NII solicits members of the public to enrol in the Investment Mastery Program for a fee of $15,000.

The ACCC is seeking injunctions restraining Mr Kaye and NII from publishing the advertisements and corrective advertisements on radio, in print and on Mr Kaye’s website.

Kaye was not his usual talkative self after receiving the writ preferring to issue a tightly scri pted statement:

“Mr Kaye and the National Investment Institute strongly deny the charges laid by the ACCC and wish to advise that they will be vigorously defending their position on this matter.

“Neither Mr Kaye nor the National Investment Institute will be making any further comment in relation to this matter at this time.”

Kaye faces Justice Goldberg in the Melbourne registry of the Federal Court on October 29th.

In July, the Australian Securities and Investments Commission obtained undertakings from Kaye fellow director Alan Meagher, National Investment Institute Pty Ltd and associated company Novasource Consulting Pty Ltd that they would repay millions of dollars to people misled by false advertising.

The courses which Kaye, NII and Novasource ran claimed were to be ASIC approved and ranged in price from $4,000 to $55,000.

Neither Mr Kaye, NII nor Novasource hold an Australian Financial Services Licence (AFSL) to give financial product advice as required by ASIC.