The NSW Government has ordered landlords, agencies and renting platforms to refund almost $180,000 of illegal fees charged to renters.
The state’s Rental Taskforce has found more than 3000 renters were charged dishonour fees (when an automatic payment is declined) or made to pay for background checks, both of which are illegal in the state.
According to NSW Fair Trading, which administers the Taskforce, this is the first finalised investigation into illegal fees charged to renters.
The Taskforce found that a single real estate agency, which it has not named, issued 2071 illegal dishonour fees to 795 tenants between July 2020 and April 2025.
A single real estate agency issued 2071 illegal dishonour fees to 795 tenants
In another case, nearly 2400 applicants were illegally charged $19.95 for background checks on an online rental platform, with the company forced to hand back over $48,000 and remove the background check function from its website.
Tenants’ Union of NSW CEO Leo Patterson Ross says although landlords were prevented from charging tenants for background checks around 15 years ago, online platforms stepped in to exploit a legal grey area and charge renters anyway.
“It was marketed as a voluntary fee to improve your chances of getting a property, but it’s all about harvesting data then using it to restrict your access to a home,” says Patterson Ross.
Offenders should face tougher penalties, says tenants advocate
When asked what consequences the offending businesses and landlords faced for these breaches, a spokesperson from NSW Fair Trading says they have been asked to stop charging illegal fees, repay tenants in full, and participate in staff training and compliance audits.
Patterson Ross says this latest crackdown is a welcome improvement in enforcement, but there are still not enough consequences.
“There’s tens of thousands of agents and hundreds of thousands of landlords, and it is not clear that the level of enforcement will be more than the cost of business,” he says.
This latest crackdown is a welcome improvement in enforcement, but there are still not enough consequences
NSW Fair Trading says if businesses continue to do the wrong thing, they can expect tougher consequences including fines or more serious enforcement action, particularly for repeat or deliberate breaches.
NSW Rental Commissioner Trina Jones says while enforcement by the Rental Taskforce shows work is being done to create a fair and balanced marketplace, it also shows renters are becoming more aware of their rights.
“It’s critical to make sure people know their rights and where to access help when they need it,” she says.
Advocates say these issues aren’t limited to NSW.
Call for a national framework for tenants’ rights
A recent CHOICE investigation revealed that real estate agents around the country have forced tenants to use online platforms to pay rent, many of which charge extra fees.
Despite laws in several states giving renters the right to say no, tenants and advocates told CHOICE the power imbalance of the housing market made it hard for renters to stand up for their rights, for fear of jeopardising their housing.
While NSW and Victoria have taken on a more active regulatory role, Patterson Ross says Australia needs a national framework so that tenants’ rights, particularly around extra fees and data sharing, are protected.
He says many tech platforms have cleaned up their act in NSW, but continue to exploit renters in other states where the laws are less clear.
Jarni Blakkarly is an award-winning Investigative Journalist at CHOICE. Jarni has worked for news organisations such as SBS, Reuters, Al Jazeera English, ABC 730, Radio National, BBC World Service and Deutsche Welle.
Jarni won the Walkley Foundation's young journalist of the year student category award in 2016 and was the recipient of a Melbourne Press Club Michael Gordon fellowship in 2022. In 2023 he was a highly commended finalist in the Quill Awards and a winner at the 2024 Excellence in Civil Liberties journalism awards. In 2024 he was elected to serve on the Federal Council (National Media Section) of the MEAA. Jarni has a Bachelor of Communications (Journalism) from the Royal Melbourne Institute of Technology (RMIT).
Jarni Blakkarly is an award-winning Investigative Journalist at CHOICE. Jarni has worked for news organisations such as SBS, Reuters, Al Jazeera English, ABC 730, Radio National, BBC World Service and Deutsche Welle.
Jarni won the Walkley Foundation's young journalist of the year student category award in 2016 and was the recipient of a Melbourne Press Club Michael Gordon fellowship in 2022. In 2023 he was a highly commended finalist in the Quill Awards and a winner at the 2024 Excellence in Civil Liberties journalism awards. In 2024 he was elected to serve on the Federal Council (National Media Section) of the MEAA. Jarni has a Bachelor of Communications (Journalism) from the Royal Melbourne Institute of Technology (RMIT).
For more than 60 years, CHOICE has been fighting the good fight for Australian consumers.
In the past year alone we've uncovered systemic issues with sunscreens, investigated shonky supermarket pricing, fought for stronger scam protections and helped make complex energy pricing fairer and clearer.
CHOICE is here to provide unbiased advice and independent testing in our world-class labs. We buy the products we test, just like you do, and our expert reviews are influence free. We’re here to help you choose smarter. Hopefully you’ll also save some money along the way.
Thanks to CHOICE, you’ll never be alone when a business treats you unfairly. You can support our work by joining or donating to our cause.
