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After property education company DG Institute copped more than $20 million in penalties for misleading students and director Dominique Grubisa was banned from managing companies for five years, a determination has now been made by the Privacy Commissioner that the group unlawfully scraped data.
An investigation from the Office of the Australian Information Commissioner (OAIC) has found that Grubisa-affiliated entities DG Institute and Property Lovers Pty Ltd targeted vulnerable people, collecting personal information from court lists and databases for inclusion in their weekly leads lists.
The Privacy Commissioner determined that personal information from these lists was disclosed to participants in the companies' Elite Mentoring Program, whereby students were encouraged to to find ‘distressed properties’ in circumstances where a property owner might be incentivised to sell their property below market value as result of divorce, bankruptcy or a deceased estate.
While the companies did remove the names from their lead lists of some prospective property owners in distressed situations for ‘privacy’, they continued to provide instructions and guidance to participants of the program on how to re-identify individuals.
The companies were found to have failed to collect the personal information by fair means, take reasonable steps to notify individuals whose information was collected, and to ensure that the information it collected was accurate and up to date.
"I am of the view that the respondent did not collect the personal information of individuals by fair means,” Privacy Commissioner Carly Kind said.
Specifically, the respondent collected individuals’ personal information contrary to the terms and conditions of the third parties’ websites and databases and in circumstances where those individuals had no knowledge or awareness of the collection. Further, those individuals were in or perceived to be in vulnerable positions and could not have reasonably expected the respondent to collect their personal information.
“The OAIC is an advocate of the next round of privacy reforms including a test of ‘fair and reasonable’ data use,” Commissioner Kind said. “Such reforms would cover many of the practices canvassed in this determination.”
Commissioner Kind has ordered that both companies immediately cease unfairly collecting personal information of individuals from third parties, destroy their leads lists within 30 days, provide the Office of the Australian Information Commissioner with evidence of the action it has taken to address the issues raised, and update their privacy policies. Property Lovers is also required to publish a written apology.
Both DG Institute and Property Lovers have a right to review the determination, which is not before the courts.
In July the Sydney-based real estate and wealth education provider DG Institute was ordered to pay $14.7 million in refunds to thousands of students over misleading representations, as well as a $5 million pecuniary penalty. Grubisa, meanwhile, was ordered to pay $1 million in fines.
Redress orders from the Federal Court required DG Institute to refund consumers an amount equivalent to the course fees paid by more than 2,100 students who enrolled in the Master Wealth Control (MWC) between April 2017 and November 2022.
The institute had told students they could utilise a so-called “impenetrable Vestey Trust” structure to protect assets from creditors, which the regulator found did not provide the level of protection that was promised.
Students of another course run by the institute were told they could assist distressed homeowners to sell their home and retain some of the equity, whereas such homeowners would lose any remaining equity if the property were repossessed by a mortgagee - a claim refuted by the the consumer watchdog as mortgagees are only entitled to amounts owed plus any reasonable costs of recovery.
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