Developer Kenyon Clarke of Du Val Group. Photo / supplied
Developer Kenyon Clarke of Du Val Group. Photo / supplied
Auckland property developer Du Val Group admits its staff posted positive company reviews without saying they worked for the business but says there's nothing wrong with that.
The company headed by Kenyon Clarke said it was a "mark of its success" and how valued people felt.
The Commerce Commission said it had received a complaint of potentially misleading reviews last month but was not investigating the business.
This comes after the Financial Markets Authority last week told the company to remove advertising likely to mislead or deceive investors.
Du Val said today the reviews just showed how "engaged" staff really felt.
"While we understand that some of our staff have posted positive google reviews about Du Val Group and have not identified themselves as being associated with the company, we consider it a privilege to have such an engaged team," a Du Val statement out today said.
"We have asked those staff who have posted reviews to disclose their relationship with Du Val Group," it said.
Du Val will ensure full disclosure and say if people posting reviews are working for the business.
Kenyon and Charlotte Clarke of Du Val Group. Photo / Spy
"Going forward, we are happy for our staff to post their reviews on Google and we will be monitoring these reviews to ensure staff identify themselves as part of the Du Val team.
"These reviews were written by staff, which is allowed, but we have gone back to the staff and asked them to disclose their relationship with Du Val," a spokeswoman said.
The commission said today it got one complaint about Du Val Group alleging that it engaged in misleading conduct in relation to reviews in September.
"We are not currently investigating the trader and cannot comment on the conduct. In general terms, reviews must be genuine and presented in a way that does not mislead consumers. In publishing reviews, businesses and reviewers should clearly disclose any relationship affecting the impartiality of a review. Businesses that collect and present reviews in a way that misleads consumers may be breaching the Fair Trading Act," the commission said.
Online reviews provide an increasingly important source of information for consumers.
In 2019 Bachcare was fined $117,000 for misleading consumers by altering and withholding publication of online reviews posted by users of its accommodation services, following a commission investigation.
"We have published guidance to assist businesses to meet their legal obligations when they collect or publish customer reviews," it said.
"If consumers think a business or person isn't complying with one of the laws we enforce, they can make a complaint to us by visiting our website. Alternatively, they can call us on 0800 943 600.
"We get thousands of complaints every year, so we investigate some complaints but not others. Our focus is to make sure New Zealand markets work well and consumers and businesses are confident when buying or selling goods and services. Complaints are assessed against our enforcement criteria, and with reference to the resource that is available to investigate. This means that we tend to be most interested in the issues that could cause widespread harm to New Zealanders."
On October 7, the Financial Markets Authority Te Mana Tātai Hokohoko told the company to remove advertising likely to mislead or deceive investors.
Du Val's statements about its mortgage fund breached fair dealing provisions because they gave the impression that the investment was low risk, it said.
"In fact, property development including associated finance is inherently risky," the FMA said.
Clarke told the Herald this month that action was over the mortgage fund which had raised around $20 million from wholesale investors: "We have not had a single concern," Clarke said of people in that fund.
But the FMA said Du Val's statements said the fund had "the best of both worlds", with high security and high return and comparing it favourably to bank term deposits but without a balanced view of the risks.
Owen Culliney, a Du Val Capital Partners director, said: "The FMA has determined that some of Du Val Group's historic social media advertising relating to wholesale investment products, which invited potential investors to simply make an enquiry, did not comply with Section 19 of the FMC Act."
Culliney said the business was "disappointed by the FMA's approach to the use of social media advertising, saying it is out of step with other jurisdictions and modern communication and marketing channels.
"We are respectful of the role the FMA plays as a financial market regulator and we take our compliance obligations very seriously. However, we fundamentally do not agree with the FMA's analysis of how wholesale investment funds can be marketed, in particular through social media and other digital channels for advertising. We will be challenging those findings through the courts," Culliney said.
Du Val complied with the FMA's direction in the interim and removed the social media content and have made the required changes across our financial product offers.
But Culliney said in this digital world, people sourced information through a wide variety of channels. We believe social media has a significant role to play in supporting organisations to speak to their customers.
In July, Clarke announced the settlement of two assets for its build to rent fund.
That $35m fund has bought two properties with 171 studio apartments to Mangere Bridge and Mangere East, managed by Du Val Portfolio Management.
