Is Property Training a Scam or Rip-off?

Is property training a scam or rip-off?  The simple answer is that it can be. Ensure that you are not scammed or ripped-off by being constantly alert before, during and after your training.

Disclosure: Some of the links in this post are affiliate links and if you go through them to make a purchase I will earn a commission. I only link to products or companies I consider to be of quality.

If you are thinking about signing up for paid in-person property training, it is essential to put the training, training company and trainers under the microscope.

In this blog:

  • A scam is an illegal, improper or unethical way of making money from people, especially by tricking them, deceiving them or pulling the wool over their eyes
  • A rip-off is something that is not worth what has been paid for it, especially something that is grossly over-priced

Concerns about property training scams and rip-offs

Issues as to the conduct and integrity of training companies were thrown into the limelight recently when the BBC highlighted the case of Doncaster soldier Danny Butcher.

In Inside Out the BBC revealed that Mr Butcher tragically took his own life last year after falling heavily into debt to the property training company Property Investors.

The death raised serious questions about the ability of property companies to deliver the financial success they usually promise. There is increasingly a feeling that people are being lulled into paying for expensive courses by unfair practices

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♦ Telltale signs that your property training is a scam or rip-off: Free courses

There are several telltale signs that property training could end up being a scam or rip-off.

First of all, be wary of free courses.

Often you will see adverts offering a free course or training. They can be for a couple of hours or even a couple of days. The longer the free course, the more tempting the offer. Everyone likes a free lunch, and a long free lunch is even more attractive.

However, it is true what they say. There is no such thing as a free lunch.

Typically the free course or training is part of a cleverly crafted plan to get you to pay for an expensive course further down the line. The cost of such subsequent courses will wipe out the losses made on the free course and make a chunky profit on top.

By attending free courses you may be placing yourself in an elaborate sales funnel where the goal is to sell not one but several expensive courses to you over a number of years.

Some common tricks of training companies

Training companies use several marketing devices to entice you to sign up for free courses.

Examples include:

  • Revealing that a famous or well-known person or property guru will be in attendance
  • Suggesting that free tickets are in short supply
  • Applying an unrealistically large figure to the value of the free ticket or event – saying things such as “The usual value of this free ticket is £799”. Really? For a “two hour seminar”?

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The longer the free training, the greater the risk

Long free courses are a two-edged sword. A long course will give you the chance to acquire a large amount of property information for free.

However, it also gives the training company longer to push you through its sales funnel.

On a long course, the trainers will have more time to convince you as to the value and benefits of their training. Having invested substantial time, you may be more inclined to take matters further by attending another (paid) course.

The risk of being scammed or ripped-off may be greater with longer free courses.

Beware of hype

An obvious tell-tale sign that your free property training could end up being a scam or rip-off is the presence of too much hype, excitement, and hyperbole.

Be super-cautious if the trainers or “gurus” are trying to whip the audience into a state of over-excitement or over-confidence.

Clearly, no good trainer will want their audience to fall asleep. However, any attempt to create anything approaching evangelical fervour should be viewed with serious suspicion.

Always ask yourself:

  • Am I getting valuable hard facts or information or am I being sold a story or dream?
  • Are the claims being made by the trainers measurable, realistic and verifiable?
  • Is there over-exaggeration?
  • Are things being made to appear simpler and easier than they should?

Outline of coaching benefits

♦ Telltale signs that your property training is a scam or rip-off: Credit cards

You should be on high alert if you are asked to bring your credit card along to a free property event.

A credit card is a quick and easy way training companies can get you to sign up for a paid course at the end of a free course.

Using your credit card to pay for a course, especially an expensive one, is very risky. Will you be able to afford the monthly credit card payments after you have paid for your course?

Some training companies push the line that you will easily be able to pay back your credit card debt once you implement the property strategies revealed in the free training. However, you should satisfy yourself that any such representation is totally realistic.

In particular, you should be very conservative as to any timescale given to you by your trainers.

If, for instance, you are told that it is realistic for you to start earning money within 6 months, make all your calculations on the basis that you will take twice or even three times that amount of time.

Pressure tactics

If you are subject to pressure tactics by the staff of a training company, there is a high chance that you could end up being scammed or ripped off.

You should be extremely cautious about all time-sensitive requests to take action fast, without being given the time to mull over things and leisurely decide what is your best move.

Examples of high-pressure tactics include:

  • Encouraging you to sign up for a paid course immediately after a free course
  • Urging you to follow others and go to the back of the room to sign up
  • Telling you that a discount or offer will expire if you don’t sign up within a short space of time.

Disregard for your financial circumstances

Another danger sign is where you are being asked or pressured to sign up for training where you don’t have the money to pay without borrowing.

Look to walk away if you are asked to increase your credit card limit or to take out an unaffordable loan to pay for training.

If the training company is not interested in your ability to afford their course without financial damage to yourself or your family, that is a strong sign that their intentions are improper or unethical. It is a sign that their only concern is to earn a huge fee from you.

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♦ Telltale signs that your property training is a scam or rip-off: Expensive courses

A very strong sign that your property training is a scam or rip-off is where it is very expensive – costing several thousand pounds.

When deciding whether a course or training is very expensive, you should not just look at the headline figure. You should assess whether the charge is value for money or reasonable taking into account what you are going to get from the training.

First of all, work out what exactly you will realistically achieve by paying for the training on offer. What valuable knowledge or information will you receive? Can you realistically turn it into the income or profit promised by the training company?

Work out the hourly rate of your trainer

Secondly, work out the hourly rate of your trainer.

Say the training programme is 9 hours a day for 3 days, meaning that you will receive 27 hours of training from your trainer. Further, say the training fee is £2,000.

£2,000 divided by 27 hours gives an hourly rate of £74.07. Multiply this by the number of students to get the trainer’s total hourly rate. If the trainer is training 100 students at the same time as training you that’s an hourly rate of  £7,407  – grossly excessive in most people’s eyes – a rip-off.

To do this type of calculation you need to know how many people will be trained by your trainer, something that you will not usually know until you attend the course.

To do the calculation before you decide whether to attend simply ask the training company about the number of attendees. Double-check their figures by seeing what information you can find out online or on social media. You can also speak to anyone you know who has attended the same training in the past.

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If you suspect that you have been scammed or ripped off by a property training company, the first thing to do is to look at your contract or terms and conditions.

You may have a legal claim against the property training company if:

  • They are in breach of their contract with you
  • They have misrepresented their service to you.

If you need assistance in interpreting any contractual provision or identifying your rights contact a solicitor or other legal expert. Seek advice as to whether you can successfully bring a court claim.

If the training company has a complaints procedure you may be able to rely on that to achieve the redress you seek.

Where you are not happy with the outcome of your complaint, check to see if the training company is registered with one of the two external redress bodies – the Property Redress Scheme (PRS) or the Property Ombudsman.

All training companies must comply with consumer protection laws. They must trade fairly in accordance with regulations for the protection of the public when goods or services are supplied. Failure can lead to prosecution.

♦ Conclusion

Not all property training companies are scamming or ripping-off their customers or providing poor, expensive substandard service.

There are many high-quality property training companies and trainers providing good quality, value-for-money training at fair rates.

The information and knowledge they provide could be the difference between someone being a success or failure as a property investor.

On the other hand, there are also training companies not delivering on their promises even though they are making exorbitant charges. In many cases, they are scamming or ripping-off their customers, deliberately or not.

Before paying for any property training you should carry out thorough due diligence in advance. That is your best weapon against the scammers and rip-off merchants.

Disclosure: Some of the links in this post are affiliate links and if you go through them to make a purchase I will earn a commission. I only link to products or companies I consider to be of quality.

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About the author

London-based blogger Dalton Barrett has over 30 years experience as a property solicitor, conveyancer, investor and coach. Read about his unconventional worldview of property here

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Dalton Barrett
Rebel Property Coach

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