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Haunted by a
When Jean and Steve, not their real
names, went to a retirement planning
seminar in 1998, they expected to walk
away with a few tips on maximising their
savings nest egg for when it came time to
eventually leave the workforce.
Instead, they fell victims to a common
con that cost them a small fortune for
more than a decade.
Back then, the Tamworth couple were
nearing 50, had some equity in their
family home and were keen to ensure
they maintained a comfortable lifestyle in
their retirement years.
“The seminar gave some really
frightening scenarios of what was
needed for a retirement anywhere like
the life we were living, which was hardly
extravagant,” Jean recalls.
Concerned, they agreed to a no
obligation financial consultation a few
days later. There, they were told about
property investment opportunities that
would cost $50 a week to maintain and
help provide for their twilight years.
Jean and Steve travelled to the Gold
Coast and were whisked to a number of
apartments. To say they felt pressured
would be an understatement, she says.
“The whole scene was presented with
increasing levels of urgency. Our minder
was a little miffed that we wouldn’t sign (a
While discussing their options back
at the hotel, they flicked open the
newspaper that was in their room. The
property section was missing, which they
later realised was no accident.
If there had been an easy way of
comparing local property prices – given
this was pre-internet listings – they
might’ve seen the massive gap between
what local agents were fetching and what
they were being asked to pay. The next
morning, they met with the company’s
investment adviser. They liked one of the
holiday apartments and it came with a
one-year rent guarantee, so they agreed
to purchase it.
“Coincidently, a solicitor just happened
to be working in an office upstairs on
the Sunday morning and prepared the
contract for us to sign. We really had
no idea just how badly we’d been bitten
years later, a
bank valuation of the unit
came in at $165,000 – well below
the inflated $232,000 purchase price
they’d paid. Soon after, management
costs and commissions began to spiral
out of control. They’d bought a lemon.
They weren’t alone. Dozens of interstate
investors had been sold overpriced
properties by the same dodgy outfit.
Jean and Steve joined a class action
lawsuit, went to the media and fought to
recoup their losses, but in the end it was
to no avail.
Their case was thrown out of court and
they were stuck.
“We owned the unit until January (2013)
when we sold it for $210,000. It took a
long time to sell. Nearly 15 years later, the
price we got was still less than what we
paid for it. So much for the eight per cent
per annum capital growth promised by
Jean blames much of her husband’s ill
health on the stress of the experience.
Instead of contributing to their
retirement, that apartment gouged about
$12,000 per year from their savings.
“As a result, I’m still working at nearly 67
years of age,” she says.
“We were just an honest, perhaps
financially naïve couple from a rural
town. Hardly sophisticated investors. We
wanted to be independent and not a drain
on the community.”
THE NUMBERS | JEAN AND STEVE
Surfers Paradise, Qld
* Includes management commission, advertising, body corporate, cleaning, interest etc.
æThe whole scene was
presented with increasing
levels of urgency.
Our minder was a little
miffed that we wouldn’t
sign (a contract)
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