Strata management giant Netstrata is reportedly trying to have some damaging findings removed from the latest draft of an independent report into allegations of misleading business practices.
Netstrata has been accused of failing to fully inform clients about lucrative insurance commissions and broking fees while failing to obtain competing quotes for strata insurance policies in favour of its preferred insurers and taking kickbacks from suppliers.
The inquiry by independent experts McGrathNicol was launched last year by NSW Fair Trading following reports on ABC TV’s 7.30 and Four Corners.
The latest news comes as NSW Fair Trading’s new regulations requiring greater transparency by strata managers about potential conflicts of interest come into force.
This week the ABC reported that Netstrata is demanding “a raft of changes “to the draft findings of an independent review into its business practices, before the final report is made public.
“A source with knowledge of the investigation said lawyers acting for Netstrata had sent NSW Fair Trading a 70-page document that refuted the adverse findings contained in a report by independent,” writes investigative reporter Amy Greenbank.
She adds that draft report contains findings of a range of breaches, including that Netstrata had not disclosed broking fees to clients, or obtained three insurance quotes as required.
A review of Netstrata’s practices was launched in May 2024, after an ABC 7.30 investigation found Netstrata had been using its wholly-owned insurance arm to charge apartment owners inflated insurance brokerage fees, while taking kickbacks from its contractors and suppliers.
Now, anonymous sources have said, Netstrata has handed a 70-page submission to the regulator which includes new documents which had not previously been handed to McGrathNicol investigators, and which the strata firm hoped would result in at least some of the findings being dropped before the final report was delivered.
This comes as increasing numbers of the company’s clients are asking what has happened to the reports. Netstrata will doubtless be concerned that if their existing strata communities can link reported misdeeds to their own contracts, they will be able to sack them and find new strata management companies.
You can read the full ABC report on this link. Netstrata did not respond to the ABC’s questions.
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Tagged: ABC, commissions, Insurance, kickbacks, Netstrata
Insiders have told the ABC that Netstrata has submitted a 70-page document countering some of the findings in the draft report into its “Strata Trap” allegations.
[See the full post at: Netstrata wants some report findings scrapped]
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