Renters in New South Wales (NSW) have received nearly $50,000 in refunds after being unlawfully charged for background checks during their rental application process.
These charges, which ranged from $25 to $40, were presented as a way to help applicants secure rental properties by improving their chances of approval.
However, a change to rental laws in NSW in October 2024 banned landlords from charging applicants for background checks. Despite this legal change, a recent investigation revealed that an online rental application platform continued to charge renters for background checks.
According to 9news, the platform sold searches of public databases and the National Tenancy Database for $19.95 each. In total, 2,372 rental applicants were charged, amounting to $47,321 in illegal fees.
Platform Response
Following the investigation by the rental task force, the platform in question voluntarily refunded the affected customers. The company also disabled the background check feature on its website and committed to periodically reviewing its operations to ensure compliance with the law.
The platform attributed the continued charges to a “system error,” explaining that the background check option remained active on the website despite the legal changes banning such fees.
NSW Fair Trading and Legal Action
NSW Fair Trading has urged renters who have been charged for background checks to lodge complaints online. The authority, which has been actively cracking down on unlawful rental practices, is also working with NSW Police to investigate instances of misappropriated rental bonds and trust funds.
Recently, on March 7, 2025, real estate agent Vanessa Nguyen was sentenced to a 15-month intensive correction order, requiring her to complete 180 hours of community service and pay $80,866.20 in compensation.
Nguyen was found to have taken more than $100,000 dishonestly from the NSW Rental Bonds and a trust account managed at Ray White Canley Heights. She made 25 rental bond claims and, on several occasions, transferred a total of $50,505 from the agency’s trust account into her personal account.
Fair Trading Minister Anoulack Chanthivong highlighted the severity of the issue, stating that the legal consequences for real estate agents involved in such misconduct are significant.
“The significant prosecutions and punishments we are seeing for real estate agents also show that the message is clear – if you are doing the wrong thing, the rental taskforce will catch you, and serious legal consequences will follow,” he said.
The rental task force, which has been set up to crack down on unethical rental practices, is continuing its work to protect renters and ensure compliance with the law.
There are currently 2.3 million people renting in NSW, and the task force remains focused on tackling dodgy landlords and illegal practices.
For more information, renters affected by these practices are encouraged to lodge complaints with NSW Fair Trading online.
This is a significant win for renters in NSW and a strong message against illegal fees. It highlights the importance of understanding tenant rights and the legal boundaries for landlords when it comes to background checks. The fact that thousands of renters are receiving refunds underscores the widespread nature of this issue and the need for greater awareness and enforcement of regulations. This case serves as a valuable reminder for both landlords and tenants about the legalities surrounding rental applications and associated costs. Thanks for sharing this important news from Australia!