Consumer affairs ministers from around the country will meet to discuss the retirement village scandal and investigate possible solutions.
The Federal Government’s Small Business Minister, Michael McCormack, announced that he would discuss recent allegations of unfair practices at retirement villages, first revealed in a joint probe by Fairfax and the ABC’s Four Corners program, at a meeting of Consumer Affairs Ministers in August.
Retirement village group Aveo has come under fire for what some elderly residents say are inscrutable practices. The ACCC is also investigating allegations of misleading conduct, unfair contract terms and unconscionable conduct.
The Aveo Group’s share price hit a two-year low of $2.40 earlier this week as the retirement village provider continues to suffer from the fallout of a negative media investigation into its operational practices.
“It is important that when older Australians make the life-changing decision to enter a retirement village, they can be confident they have made the right decision and are supported by strong consumer protections,” Mr McCormack said.
“Like many Australians, I have family and friends in these villages. As the Federal Minister responsible for consumer affairs, I want older Australians to get the care and residences they deserve without unnecessary stress or worry.
“Recent reports include overly complex contracts, excessive fees and charges, high-pressure sales tactics, high exit fees and exorbitant refurbishment costs – which can impact on older Australians, their families and carers.”
Retirement villages are governed by state legislation but the contracts are also subject to the Australian consumer law, which prohibits unfair contract terms.
In June, the chair of Consumers Federation of Australia, Gerard Brody, told YourLifeChoices he believed Aveo’s contracts were unfair.
“These are big operators with national businesses and it is the business model (of using exit fees as pure profit) which needs to be tackled to avoid losses to residents,” Mr Brody said.
“State governments must be the first to respond. I urge all retirement village residents who feel aggrieved to call on their respective state governments to improve regulation of the sector so people are treated fairly.”
The Ministers will consider the effectiveness of current legislation and enforcement arrangements covering the retirement village industry.