AGED CARE OPERATOR AVEO MAY FACE CLASS ACTION FROM RESIDENTS

Written on the 29 June 2017 by Ben Hall

AGED CARE OPERATOR AVEO MAY FACE CLASS ACTION FROM RESIDENTS
MADDENS Lawyers is considering a class action against retirement village operator Aveo after a Four Corners-Fairfax investigation revealed its complicated contracts and exorbitant fees.

The law firm issued a statement late on Thursday calling on residents at Aveo facilities to get in touch with them if they feel they have been financially disadvantaged by their dealings with the aged care operator.

Maddens Lawyers Class Action principal Brendan Pendergast says early investigations indicate that further inquiries should be made in respect of Aveo Group's conduct.

"We need to communicate with those affected parties to gather more information so that we can assess whether there are grounds upon which to pursue affected persons' rights," Pendergast says.

"Registering with Maddens is free, and it does not mean that a person has engaged a lawyer or is obligated to take action.

"It's an excellent way to remain informed about the progress of our investigations, and options in relation to legal action should it occur."

The joint investigation, which was broadcast on Monday night, revealed stories of financial loss experienced by some of the residents in Aveo retirement villages who are not given adequate support from "underfunded" consumer affairs bodies.

At the centre of the report, Four Corners spoke with residents and former residents and revealed the contracts they signed which include specific clauses relating to property sales and ongoing fees.

These contracts have been described by lawyers and consumer advocates as "complex" and "rapacious".

The news partnership also spoke to current and former residents as well as their children, lawyers, former Aveo staff and lobby groups to substantiate its evidence.

Four Corners and Fairfax journalists probed mainly into Aveo's contracting and property sales processes, as well as the overall treatment of residents at its aged care facilities.

Questions included why Aveo Group's exit fees, or "deferred management fees", varied between individual contracts and why formers residents were still being charged maintenance fees after they left the villages.

The journalists also inquired about Aveo's property valuation scheme, and why there have been reported cases where residents have been waiting years to sell properties which have been valued at less than the median market or purchase price.

The investigation has led to widespread calls for an inquiry into the retirement village sector, led by Labor, the Greens and former Australian Competition and Consumer Commission chairman Allan Fels.

Meanwhile, the corporate watchdog has been called up to investigate recent trading in Aveo's shares ahead of its $145 million buy-back on Tuesday, the day after the Four Corners report was broadcast.

The buy-back of 9.3 per cent of the company's shares was launched by its largest shareholder Mulpha and an Aveo director, Jim Frayne.

On Monday, Aveo's share price plunged more than 11 per cent as news of the joint investigation was reported in the media. Under company law, directors are not allowed to trade while having inside information.

ASIC has confirmed it will investigate the trades.

Business News Australia
 
Author: Ben Hall

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