Collusive auction bidding not prevalent: Consumer Affairs Victoria

Collusive auction bidding not prevalent: Consumer Affairs Victoria
Collusive auction bidding not prevalent: Consumer Affairs Victoria

Victorian Consumer Affairs Minister Heidi Victoria has rejected weekend media reports that ­collusive bidding was a problem at weekend auctions.

Consumer Affairs Victoria is not aware that this practice is currently prevalent ,” she told the Australian Financial Review.

The paper reported two or more ­bidders representing one buyer at an auction, creating the impression there are multiple buyers, was a common occurrence at Melbourne auctions.

The AFR noted it was more of an issue in Victoria than NSW, where bidders are required to register before auction.

NSW Fair Trading Minister ­Matthew Mason-Cox said collusive bidding was already outlawed, but would consider if new forms of the practice required a legislative update.

The AFR suggested the unscrupulous buyers were working with the help or encouragement of buyer’s agents.

By creating the impression that there are multiple buyers bidding for the same property, one buyer’s agent claimed the tactic worked by reputedly saving their client $300,000 plus at auction to the annoyance of the vendor if they knew.

“It’s illegal, but very hard to police,” said Rich Harvey, from the Sydney buyer’s agency, propertybuyer.com.au, who slammed the practice in the article.

The ploy also created an impression in the vendor’s mind that there was good activity below the reserve, and so encouraging the vendor to put the property on the market, rather than pass it in.

NSW regulations state that a person must not induce another person to abstain from bidding or do anything in any way which may prevent free and open competition.

Paul Osborne from Melbourne buyer’s agency, The Secret Agent, said he had seen three people representing the same buyer bidding at auction.

"Buyers use all kinds of theatrics that are not transparent,” he said.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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Consumer Affairs Victoria Auctions

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