A property trader accused of targeting vulnerable homeowners with "no commission, no fees" house buying deals has been issued a formal warning by the Commerce Commission.

The watchdog says Peter Meng Huat Lee and his company PWG Ltd are likely to have breached the Fair Trading Act by claiming he would give buyers a "fair price" for their homes and making other false representations about his company.

Lee made headlines in 2016 when the Weekend Herald reported on his questionable tactics during the purchase of two Auckland women's properties.

After media attention he cancelled the May 2016 contract on Sarah Ewe's Mangere home amid allegations he'd taken advantage of the cancer-stricken, widowed great-grandmother in order to bag a deal.

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A few months later he abandoned the sale of Pamela Baucke's Massey house after the Herald revealed she'd sold it to Lee's company for significantly below market value without seeking legal advice after he arrived at her home with custard squares.

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The Commerce Commission launched an investigation into Lee and his company after receiving a complaint from top law firm MinterEllisonRuddWatts, which took the case pro bono on behalf of Baucke, who lives alone and suffers from a traumatic brain injury.

The complaint by the firm's then partner Zane Kennedy alleged Lee had breached the Fair Trading Act by taking advantage of the vulnerable homeowner, rushing through the sale and "counselling" Baucke not to seek legal advice because lawyers would charge her "high fees".

She signed away her house for $515,000. Online estimates put the property's then worth at between $650,000 and $730,000.

Pamela Baucke signed away her Massey house for $515,000 when buying consultant Peter Lee visited her in 2017. Photo / Jason Oxenham
Pamela Baucke signed away her Massey house for $515,000 when buying consultant Peter Lee visited her in 2017. Photo / Jason Oxenham

Commission investigators probed the two aborted transactions and delved into other purchases by Lee and his company PWG Ltd, which traded as Property Wise and Auckland House Buyers.

The commission found Lee and his company had likely made "unsubstantiated or misleading" claims publicly and online.

These included:

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• that PWG would offer "fair market value" and vendors would be better off selling to PWG than through a licensed realty agent due to savings in commission fees and marketing costs, when the business was premised on buying property cheaply for below market value.

• Claims that his two businesses had up to 20 years' real estate experience when they did not exist prior to September 2016.

• Claims that Property Wise was the recipient of a "Property Professional of the year 2013/2014" award when the business did not exist when the award was bestowed.

• That endorsements on the business' website were from genuine and satisfied customers when they actually related to the company's previous owner.

Commission chairwoman Anna Rawlings said Lee's actions were potentially illegal.

"In the commission's view Mr Lee and PWG did not have reasonable grounds to make any of these claims at the time they were being made, they were misleading and were likely to breach the law.

"These claims may have induced members of the public to use PWG's services and the commission considers that neither Peter Lee nor the business could credibly back those claims up."

Rawling said businesses had a legal duty to ensure representations about their services were accurate and would not mislead consumers.

Buying or selling a house was a major transaction and she urged consumers to carry out proper due diligence, including seeking independent legal advice.

Lee has now been issued with a formal written warning, a copy of which was obtained by the Herald.

It says though it was likely Lee's actions had breached the law, the Commission would not bring legal proceedings to establish fault.

It said the commission's investigation was launched after a complaint into the Massey purchase, which alleged misleading statements by Lee about his role in PWG, the potential savings Baucke could make, the value of her property and "the fairness of the purchase price you were offering to the vendor".

Pensioner Sarah Ewe had just finished her 12th round of chemotherapy when she agreed to sell her house cheaply to Peter Lee. Photo / File
Pensioner Sarah Ewe had just finished her 12th round of chemotherapy when she agreed to sell her house cheaply to Peter Lee. Photo / File

Investigators interviewed Lee and vendors about previous property transactions involving PWG and reviewed statements on PWG's two websites. They also obtained information about Lee and his company from the New Zealand Companies Register.

Lee told investigators he believed he was offering a fair market value given the circumstances of each sale.

He also said he had acquired PWG and its websites from a third party and believed he could continue using the old endorsements and references to business awards and industry experience.

Following the investigation he agreed to take down the two websites and was "no longer purchasing properties privately", according to the warning letter.

Lee told the commission that after receiving complaints from Baucke and Ewe he rescinded their sale and purchase agreements, which also occurred after media coverage of his purchases.

In its letter, the commission recommended that Lee seek legal advice ahead of any further commercial endeavours involving consumers.

"While we will not be taking any further action against you and PWG at this time, we will take this warning into account if this conduct continues or if you or a company you control engage in similar conduct in the future.

"We may also draw this warning to the attention of a court in any subsequent proceedings brought by the commission against you and/or PWG."

Kennedy told the Herald the commission's warning was a good outcome "and a strong message to others in this 'industry' that they won't get away with preying on vulnerable members of society".

Lee, who has always denied acting unethically or outside the law, did not respond to the Herald.