A man has been found guilty of misleading consumers into thinking they were buying properties, when in fact they were never registered on the titles as owners.
In Auckland District Court, the Home Finance Company Limited, Meguro Limited and director of both companies Christopher Mark Ashenden were found guilty of breaching the Fair Trading Act, and ordered to pay $237,048 in fines and court costs and $42,764 in reparation.
The Commerce Commission, which laid the charges, said today the companies bought residential properties, primarily in south Auckland, and then marketed them using phrases such as "why rent when you can buy?" and "why rent when you can own, rent is dead money".
People who signed up to the scheme thought they would own the properties outright, when in fact the agreement did not give them legal ownership until the end of a 30-year period.
Judge Lindsay Moore said Ashenden's offending had contained strong elements of cynicism and the calculated exploitation of people.
"By encouraging vulnerable people in the mistaken belief that they were acquiring home ownership rather than a package of rights and obligations which, on any view, fell far short of that concept, folk were lured into commitments which were a recipe for disasters in which they lost everything they had put into the property they were seeking to acquire -- indeed were given to understand they had acquired."
Ashenden had recently been declared bankrupt but Judge Moore considered this was a no more than a ploy and certainly not an indication of his true worth, so imposed significant fines.
"The court has no hesitation in concluding that Mr Ashenden is one of those people whose affairs are deliberately kept complicated to the point where it is exceedingly time consuming and expensive to unravel them."
Commerce Commission enforcement manager Stuart Wallace said the case emphasised the importance of seeking independent advice before signing up to a property deal.
"Buying a property is a complex transaction and the right advice will ensure that you are fully aware of all the risks and benefits before any financial commitments are made."
Mr Wallace said that Ashenden, who owed money both in New Zealand and Australia, now lived in the US where he promoted a product known as Brainquicken, a health supplement, on websites and blogs.
He said further civil action was continuing against Ashenden and investment companies involved in his schemes.
