Taking notice of widespread concerns and complaints regarding the prima facie deceptive marketing practices by various housing schemes in Punjab, the Competition Commission of Pakistan (CCP) has launched an inquiry to see whether these schemes have violated Section 10 of the Competition Act 2010.
Lahore Development Authority (LDA) informed through a letter that eighty-eight (88) housing schemes in Lahore and its adjoining districts of Kasur, Sheikhupura and Nankana Sahib were luring investors and the general public through print and TV advertisements to invest in their schemes, without meeting the legal requirements and in violation of the pertinent laws. LDA sought a ban on the advertising campaigns of these schemes to save the citizens from financial losses.
Taking a suo motu notice of the complaints and concerns, the CCP has authorized an inquiry team to thoroughly probe these housing schemes and submit an inquiry report to the commission. As part of the investigation, the inquiry team has visited 62 housing schemes to see the situation on the ground and is scheduled to visit the remaining housing schemes. The team has also met the DG LDA and other concerned officials to enlighten itself about the pertinent issues and explore the ways to cooperate and coordinate in the areas of shared interests.
Section 10 of the Competition Act, inter alia, prohibits businesses from indulging in deceptive marketing practices, which also include the distribution of false or misleading information lacking a reasonable basis, deceiving the consumers, and harming the business interest of the other undertakings. If the violation of Section 10 was proved against these housing schemes, the CCP may issue show-cause notices to them under Section 30 of the Competition Act.
It is very common in Pakistan that a majority of real estate developers and marketers are involved in deceptive marketing practices as well as financial dealings. Not only these companies do tall false claiming at the time of launching any scheme but they project wrong facts in terms of location and payment plans.
These companies demand hidden and inflated charges from the customers and make prolongs delays in giving possession of the property to their owners.
The step taken by CCP is much needed but different authorities should also investigate the misleading practices of real estate developers and marketers in the country and held them accountable. In this connection, a proposed federal level Real Estate Authority should be established that not only states the rules of business for the developers but also imposes heavy penalties on the stakeholders involved in unethical business practices.
Such authority will not only protect the customers’ interest and money and improve its contribution to the economy but it will also boost up the real estate industry through the country with transparency and systematic way.