Four Corners investigation reveals insurance kickbacks to strata management firms | ABC News

Published: Sep 08, 2024 Duration: 00:04:03 Category: News & Politics

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more than 2.5 million Australians now live in an apartment and over the next decade that number is set to sore while governments are sweeping away planning controls to boost the number of apartments in our Capital Cities the multi-billion dollar strata industry which is supposed to protect homeowners interests is cashing in investigative reporter Linton besser joins us in the studio now with the details hi Linton so when you put The Feelers out for this story you received quite the response tell us about that thousands of emails as you know Ros as a journalist normally it's only a small fraction that are credentialed in this case 99% of these thousands of submissions were documented and had Credence really and they complained about an industry that is meant to be there to act in the interests of owners in trying to balance the books and and look after common property and find insurance for their buildings and instead what a lot of people unfortunately are finding is that they're being exploited uh bu an industry that in many states and territories is completely unregulated with hidden and exorbitant charges and secret deals for kickbacks from contractors and other service providers um it really it came across like the wild west so the story airs tonight Linton already though there are calls uh from the A C for ban on strata Insurance commissions what's happening there well for a long time strata companies and insurance brokers have been copying a kickback a commission whenever they Place Insurance on behalf of the people instructing them the owners of these strata titles and that's been fairly controversial anyway what we find and what you'll see tonight in the four corners episode is that in addition to that um big insurance companies are forming joint ventures with strata managers many of which are very opaque to also receive further fees and a share of profits and broker fees and things like that now the A C the che Gina cascot lebe the competition Watchdog says commissions must end they are driving up the cost of insurance and they are incentivizing strata managers to act against the interests of their clients and the new southw strata and Property Services commissioner John mins has been stood aside why we interviewed him a short time ago it was 10 days or two weeks ago and unfortunately for John mins we discovered despite a public pledge that he had sold out of his interest in a maj to real estate and strata Services firm he had not his family trust had continued to ear 3/4 of a million dollar interest in that company and following that interview he was stood aside pending an investigation um which is now underway so 2 and a half million Australians live in apartments that number is set to sore what sort of Regulation do we need well we need some first of all there are lots of states and territories in Australia where there is no there is none whatever no licensing ra no regulator Gina cascot Le from the A C says Insurance commissions need to end but I think taking a step back and looking at the poor regulation or the zero regulation lot of States there's got to be a bit of interest from government um you know at Point Dot and saying well you know let's take a look at what these firms are doing so what can people who live in apartments now though do to protect themselves be vigilant is the answer and I've been asking that question RS of people I've been interviewing and and they say you've got to watch your own back and read the financials take an interest thanks Linton and you can catch the full episode of Four Corners tonight at 8:30 Eastern on ABC TV or anytime on ABC I view

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