Article originally published FEBURARY 25, 2004 –Reviewed and approved.
By Neil Jenman
More property schemes are destined to create misery.
Despite all the publicity, dozens of property spruikers are still flogging seminars for thousands of dollars and promising huge returns to followers of their methods.
Last Sunday, February 22, an advertisement for a seminar promoting one dodgy method appeared in Queensland’s Sunday Mail.
Last night, Monday February 23, a story about victims of this dodgy method was shown on Channel Nine’s Extra program. Battlers being kicked out of homes or struggling to meet crippling repayments were featured on the program, their lives shattered by this wretched scheme.
The scheme is called ‘wrapping’, a system of loan sharking that targets battlers who can’t afford to buy a home.
The self-described “expert” and promoter of this rotten scheme is a man called Rick Otton.
Mr Otton, who has been featured on A Current Affair and SBS’s Insight program seems immune to criticism. He continues to place advertisements encouraging would-be property investors to discover his “revolutionary secrets”.
On page 5 of the Sunday Mail, Mr Otton was advertising “the most life-altering seminar you will ever attend”. Come along to the Brisbane Sheraton on Thursday March 4, 2004.
For a mere $39, Mr Otton will show you how to buy a property and sell it again for 20% to 30% profit within four days.
That’s right, four days for a 20% to 30% profit. Makes Henry Kaye seem almost conservative. But, unlike, Mr Kaye, who flogged property with the promise that it was going up in value, Mr Otton promises to show investors how to make money if property goes down in value.
What’s his big secret?
Well, it’s simple. Mr Otton teaches investors to pass the pain of any loss on to others – battlers who are desperate to own a home. Investors can make a fortune from the misfortune of battlers.
Here’s the scheme.
The investor buys a home for say, $200,000. The price is then inflated by 20% – 30% and the home is sold to battlers for between $240,000 and $260,000. The battlers are also charged an inflated interest rate, usually around 30% above the normal bank rates.
If the price of the home falls – say by just 20% to $180,000, the battlers lose. This is considered “creative”. This is Mr Otton’s “revolutionary secret”.
Those thinking of attending Mr Otton’s $39 seminar on March 4 should realise that his seminar is merely a ‘come-on’ for his next seminar, the one where he rakes in thousands of dollars teaching this rotten method.
All Mr Otton has to do is claim to be “Australia’s real estate expert” and show investors that by following his scheme they too can be rich from property.
Yes, until the battlers can no longer afford the crippling repayments and the next television program or newspaper exposes this appalling scheme. And those who profit from the misery of others will be exposed for using Mr Otton’s rotten system.
The question society will then ask is, “How could such a rotten scheme allowed to happen?”
Hopefully, one day the authorities will act against property spruikers such as Rick Otton.
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UPDATE: In 2018, the law finally caught up with Mr Otton. Following action by the authorities regarding his misleading conduct, a court imposed the largest fine in Australian history on this property spruiker – $18 million.
In 2019, Mr Otton filed for bankruptcy.
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