Shane Ross

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Abusive Practices in Auctioneerinig Industry Must Stop

Posted on: May 28th, 2003

On May 28 2003 I called for an end to the abusive practices in the Auctioneering industry. I tabled a motion requesting a Code of Ethics and Professional Standards to be drawn up, applicable to Auctioneers. The complete lack of regulation in the industry has led to instances of consumer trust being severely abused. Self-regulation has completely failed in the industry.

What does one need to be in order to be an auctioneer? The answer is that one does not need to be anything. All one needs in order to qualify and practise is to lodge a €12,700 bond in the District Court.

Is there any reason a profession such as auctioneering should ever have to handle money? I see no need for it to handle, hold and give money on behalf of its clients and it is extraordinary that it feels the need to do so.

A large booking deposit was taken in a particular case of which I am aware- I believe it was £25,000 or £30,000. This arrangement has no legal standing at all and gives the purchaser no rights whatsoever. It is taken without permission by the auctioneer and it is held by him normally until the sale is completed.

Could someone please tell me what is going on in this extraordinary industry where they do not let anyone see what is happening, they take money they are not entitled to, they give the impression that the people who give them money are entitled to something to which they are not and they sell to the under-bidder at the end? This industry is self-regulating and the incident I have described is not an isolated one. It is typical of the practices in this industry.

There is an extraordinary coincidence about guide prices. Guide prices published day after day in the newspapers inevitably come in below the price at which the property is sold. These guide prices are, apparently, set by people who have an expertise in this area. Their only expertise is in continually ensuring that the prices set to give a gullible public a guide are, inevitably, pitched well below the prices at which these houses sell. Why is this? The reason is quite simple. It sucks people in, makes them borrow more and makes them do more valuations and architectural inspections. I have spoken to auctioneers who have told me, quite openly, that a vendor should pitch the price very low to get a few suckers in. That is how this profession, if that is what it is, behaves. It behaves in a way which continually fools the public .

This industry is one about which there are so many bad stories and over which there is so little regulation that there is a case for the Oireachtas to intervene and insist upon better ethics within it.

If you would like to read the whole debate, please click here.