The ACCC has commenced proceedings in the Federal Court against Master Wealth Control Pty Limited, trading as DG Institute, for allegedly making false or misleading representations about the Real Estate Rescue program and the Master Wealth Control program DG Institute offered to consumers, in breach of the Australian Consumer Law.
The ACCC alleges that between April 2017 and November 2022, DG Institute made false or misleading representations in the promotion and sale of the two paid programs to prospective students via free in-person seminars, online webinars and videos, as well as on the DG Institute website
The ACCC further alleges DG Institute also made false or misleading representations in the delivery of the Master Wealth Control program.
The ACCC alleges that Dominique Grubisa, the director and CEO of DG Institute, was involved in this conduct through her role in drafting, authorising and making the statements made on video and in promotional and program materials.
Between July 2018 and November 2022, DG Institute made representations to prospective students of the Real Estate Rescue program that they would be taught its so-called ‘equity deal’ strategy based on the premise that if a bank repossesses and sells a home, the homeowner loses all their equity because “banks don’t give change”.
The strategy involved identifying homeowners who may be in financial distress, including by monitoring court lists to identify possession, divorce or probate proceedings, and then approaching homeowners to attempt to reach agreement to purchase the homeowner’s property, or sell it on the homeowner’s behalf.
Prospective students were told to convey to those homeowners that they could help the homeowner achieve a better outcome than they would if the bank repossessed their property, because in that circumstance the entire proceeds of sale, including the homeowner’s remaining equity in the property, would be retained by the bank.
The ACCC alleges this was misleading as, in the event of repossession, a bank is only entitled to the amount owed to it plus reasonable associated costs, and so a homeowner may retain some of the value of their equity when their house is sold, depending on their individual circumstances.
“We allege that DG Institute and Ms Grubisa misrepresented to prospective students that the strategy taught in the Real Estate Rescue program would allow them to assist distressed homeowners to sell their property and retain some of the equity, when otherwise the homeowner would lose their equity if the bank repossessed, when this was not the case,” ACCC Deputy Chair Delia Rickard said.
“Students paid significant sums of money for the Real Estate Rescue program based on what we allege was misleading information given by DG Institute and Ms Grubisa in the promotion and sale of this course,” Ms Rickard said.
Further, between April 2017 and November 2022, in the promotion, sale, and delivery of the Master Wealth Control program, DG Institute represented that by setting up a type of trust called a ‘Vestey Trust’, using a suite of documentation provided by DG Institute said to be legally binding, any assets in the trust would be completely protected from creditors. DG Institute said the Vestey Trust was “bulletproof”, “impenetrable” and would result in students being “unable to be effectively pinned down by creditors”.
The ACCC alleges that this was misleading as the Vestey Trust did not provide that complete protection.
Further, DG Institute represented that the Vestey Trust structure had been tested and upheld as effective by the Full Federal Court of Australia. The ACCC alleges that this is misleading as the referenced court judgment, Sharrment, did not concern a Vestey Trust and does not provide authoritative precedent or support for the legitimacy or effectiveness of the Vestey Trust structure in protecting assets from creditors.
“Students paid significant sums of money for the Master Wealth Control program based on information we allege is misleading,” Ms Rickard said.
“We allege that students of DG Institute could have faced significant financial harm by relying on the advice of, and using materials provided by, DG Institute and Ms Grubisa, to set up what was represented to be a Vestey Trust which would completely protect their assets, when that was not the case” Ms Rickard said.
The ACCC is seeking declarations, injunctions, penalties, non-punitive orders (such as corrective publications and a compliance program) and non-party consumer redress orders against DG Institute.
The ACCC is also seeking an order against Ms Grubisa that would disqualify her from managing a company for a period to be determined by the Court.
Background
DG Institute offers courses and mentoring programs to consumers relating to property and business investment, including strategies for asset protection. The programs and strategies purported to ’empower everyday Australians to grow and protect their wealth’.
‘Sharrment’ is a reference to the judgment handed down by the Full Court of the Federal Court of Australia, in Sharrment Pty Ltd v The Official Trustee in Bankruptcy (1988) 18 FCR 449.
Between 2017 and 2022, a significant number of consumers enrolled in the Real Estate Rescue and Master Wealth Control programs, and each paid between $4,500 and $9,200 to participate in the programs.
