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ANOTHER class action lawsuit looms over retirement village operator Aveo Group (ASX: AOG) as Maurice Blackburn launches an investigation into the company's alleged unscrupulous behaviour.
Maurice Blackburn announced it will take registrations from former residents of Aveo's retirement housing chain and will seek to determine whether the company roped its residents into "unfair" and "unconscionable contracts".
A Four Corners/Fairfax investigation turned the spotlight on Aveo Group in June, alleging the company engaged in poor practices including the charging of excessive fees through complex residential contracts.
Maurice Blackburn has become the second firm to extend feelers for a class action against the retirement village operator after Maddens Lawyers launched its own investigation earlier in the year.
Class action principal at Maurice Blackburn, Brooke Dellavedova, says her firm's investigation could be the best avenue for elderly people to hold Aveo Group accountable for its actions.
"We don't think it's fair or legal to subject elderly people to complex and confusing contracts that contain unfair terms," Ms Dellavedova said.
"If enough people want to take action against Aveo, then we will look to step in and stand up for these people."
The Consumer Action Law Centre has also welcomed Maurice Blackburn's proposed regime against Aveo, with CEO Gerard Brody voicing his support.
"Until now, the retirement village sector has avoided proper scrutiny of its contracts, and it's about time someone stood up for the rights of residents," says Brody.
"We welcome the news that Maurice Blackburn will be investigating concerns of unfair and unconscionable contracts used by Aveo on behalf of former residents."
By the end of the 2016-2017 financial year, Aveo Group had doubled its profit margin to $252.8 despite the negative media coverage and public scrutiny.
When the company released its financial results, Aveo Group CEO Geoff Grady said his team was still "genuinely distressed" by the nature of the public criticism.
"We understand people have concerns about the retirement and aged care industry. We acknowledge that some residents have been confused by their contracts," he said.
"We are genuinely distressed when we fall short of the standards our consumers expect of us. I know that some consumers feel that we have let them down."
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Business News Australia
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