InvestigationAged CareBleed Them Dry

The Age / Sydney Morning Herald

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Journalism/Investigation/Bleed Them Dry

Adele FergusonInvestigative Journalist

Investigation

InvestigationAged CareThe Age / Sydney Morning Herald·26 Jun 2017

$75M ACCC Settlement Walkley Award Senate Inquiry

Bleed Them Dry Until They Die

The retirement villages ripping off Australia's elderly

A landmark investigation into AVEO — one of Australia's largest retirement village operators — exposing contracts designed to extract maximum wealth from elderly residents through exit fees up to 35%, capital gains clauses, and sales practices that left thousands of Australians with almost nothing when they tried to leave.

Read on SMH All Investigations

Bleed Them Dry Until They Die — Adele Ferguson investigation into AVEO retirement village contracts

The Age / Sydney Morning Herald

Investigation · 26 Jun 2017

Four Corners Documentary

The glossy brochures and slick advertising sell the promise of a blissful retirement in "enclaves of contentedness" where "lifestyle meets wellbeing." But residents of the retirement homes run by one of Australia's biggest providers have a very different story to tell.

Sydney Morning Herald

AVEO investigation puts sector under spotlight AVEO faces fresh allegations over death of resident

ABC 4 Corners

Watch on ABC Four Corners

Read the Investigation

The Age / Sydney Morning Herald · 26 Jun 2017

Bleed Them Dry Until They Die

The full investigation by Adele Ferguson — exposing AVEO's retirement village contracts, exit fee structures, and the sales practices that left thousands of elderly Australians financially trapped.

Read on SMH

Read the investigation — The Age / SMH ACCC action — AVEO settlement

How the Contracts Worked

Ferguson's investigation analysed hundreds of AVEO contracts and found a consistent pattern of clauses designed to maximise the company's extraction of residents' wealth — often only discovered when residents tried to leave.

Deferred Management Charges

Exit fees — called deferred management charges — could consume up to 35% of the original purchase price. The longer a resident stayed, the higher the fee.

Capital Gains Clauses

Any increase in the property's value went to AVEO, not the resident. Residents bore the risk of a falling market but received none of the upside.

Delayed Settlement

Residents who needed to move to aged care could wait months for their money while AVEO resold their unit — leaving them unable to fund their care.

Coverage & Impact

26 Jun 2017·The Age / SMH

Bleed Them Dry Until They Die — AVEO's contracts designed to extract maximum wealth from elderly residents

Jun–Jul 2017·The Age / SMH

Exit fees up to 35%: how AVEO retirement village contracts trapped residents

Jul 2017·ABC News

ACCC launches major investigation into AVEO retirement village business practices

2017·The Age / SMH

Senate inquiry into retirement village sector announced following Ferguson investigation

2018·ABC News

AVEO agrees to $75 million settlement with ACCC — thousands of residents to benefit

2018–2019·The Age / SMH

National legislative reform of retirement village contracts — the long road to change

Investigation Timeline

From First Report to $75M Settlement

Early 2017

Investigation begins

Adele Ferguson begins analysising hundreds of AVEO contracts, interviewing residents and their families, and gathering testimony from financial advisers and legal experts who had tried to help residents understand what they had signed.

26 Jun 2017Key Event

"Bleed Them Dry Until They Die" published

The investigation lands in The Age and Sydney Morning Herald. The headline — taken from a resident's own words — captures the scale of the exploitation. Public response is immediate and overwhelming.

Jun–Jul 2017

Sustained follow-up reporting

Ferguson continues reporting on AVEO's practices — exit fee structures, capital gains clauses, delayed settlements, and sales practices that failed to disclose the full financial implications to prospective residents.

Jul 2017Key Event

ACCC launches investigation

The Australian Competition and Consumer Commission launches a major investigation into AVEO's business practices — a direct regulatory response to Ferguson's reporting.

2017Key Event

Senate inquiry announced

A Senate inquiry into the retirement village sector is announced — the first formal parliamentary examination of an industry that had operated with minimal oversight for decades.

2018Key Event

$75 million ACCC settlement

AVEO agrees to a $75 million settlement with the ACCC and commits to reforming its contracts. Thousands of residents receive improved contract terms — a direct result of Ferguson's investigation.

2018–2019Key Event

Walkley Award

The investigation wins the Walkley Award for Investigative Journalism — recognition of its impact on one of Australia's most vulnerable populations.

Ongoing

National legislative reform

Calls for national legislative reform of retirement village contracts continue — the investigation permanently changed the conversation about how Australia treats its elderly residents.

The Investigation

"It's a financial trap. It's a financial sinkhole. Once you're in, it's very hard to get out." These words, from a resident of an AVEO retirement village, captured the essence of what Adele Ferguson's investigation uncovered in 2017.

"It's a financial trap. It's a financial sinkhole. Once you're in, it's very hard to get out."

— AVEO resident

AVEO was one of Australia's largest retirement village operators, with more than 90 villages and 13,000 residents. Its contracts, Ferguson found, were among the most complex and financially punishing in the industry — designed, critics argued, to maximise the company's extraction of residents' wealth over time.

The investigation drew on analysis of hundreds of contracts, interviews with residents and their families, and testimony from financial advisers and legal experts who had tried to help residents understand what they had signed. Many residents had entered villages believing they were making a straightforward property purchase. They discovered, often only when they tried to leave, that the financial reality was very different.

Exit fees — known as deferred management charges — could consume up to 35% of the original purchase price. Capital gains on the property went to AVEO, not the resident. Residents who needed to move to aged care could find themselves waiting months for their money while AVEO resold their unit.

Exit fees could consume up to 35% of the original purchase price. Capital gains went to AVEO, not the resident. Many were left with almost nothing.

The investigation also examined AVEO's sales practices, finding evidence that sales staff had downplayed or failed to disclose the full financial implications of contracts to prospective residents.

The ACCC launched an investigation following the publication of Ferguson's reports. AVEO ultimately agreed to a $75 million settlement and committed to reforming its contracts. The investigation also prompted a Senate inquiry into the retirement village sector and led to calls for national legislative reform.

35%Max exit fee on purchase price

13,000+AVEO residents affected

$75MSettlement reached with ACCC

Who Was Harmed

“They were elderly. They were trusting. They were making one of the most significant financial decisions of their lives — and the contracts were designed to exploit every one of those vulnerabilities.”

AVEO's residents were among Australia's most vulnerable — elderly people, often recently widowed, making a once-in-a-lifetime decision about where to spend their final years. Many had no legal or financial advice before signing. The investigation gave them a voice, and the ACCC settlement gave them justice.

Read the Full Investigation

Impact