Australia’s corporate watchdog has savaged real estate agents encouraging vulnerable tenants to use their superannuation for rent payments, saying such behaviour could actually break the law.
The Australian Securities and Investments Commission (ASIC) today voiced its concern that real estate agents are taking advantage of the Federal Government’s recent announcement that Australians can dip into their superannuation funds during the coronavirus (COVID-19) crisis.
While Prime Minister Scott Morrison has announced a six-month eviction moratorium, and has urged tenants, landlords, and banks to “sit down” and “work out” compromises to endure current hardships, today’s letter suggests some real estate agents are ignoring all of that and telling punters to draw down their retirement funds to pay rent.
“Tenants facing financial difficulty need sound financial guidance and potentially debt counselling,” said Tim Mullaly, ASIC’s Executive Director of Financial Service Enforcement.
“Specifically pointing them to and recommending them to consider the specific possibility of accessing superannuation is, again, likely to amount to a breach of the Act.”
He said real estate agents could be in deep shit if they provide unlicensed financial advice, or advice that’s not in the best interest of individuals. Prison time and hefty fines apply for people found to have breached those rules.
“ASIC intends to monitor this situation closely, and if contraventions of the licensing requirements of the Corporations Act are found, ASIC will not hesitate to act swiftly to protect vulnerable consumers,” Mullaly said.
The letter is a strong statement from the nation’s corporate regulatory body, and it comes smack bang in the middle of a phenomenal economic crisis.
Tens of thousands of Australians have been put out of work due to mandatory COVID-19 shutdowns, meaning traditional sources of income — ergo, the source of rent payments — have been severed.
Despite huge stimulus packages designed to help unemployed Australians and those whose jobs are vulnerable, the financial strain is still heavy for many of us.
Today’s smackdown from ASIC suggests that landlords can’t just ask renters to hack away at their retirement funds to get through it.
You can read the full letter here.