A complaint against Purplebricks has been informally resolved by the Advertising Standards Authority.

However, the complainant in the case has told EYE that he is surprised that no further action has been taken, given that the ASA has now approved something it has banned in the past – the showing of an estate agent’s percentage fee plus VAT.

Previously, it has ruled that fees must be shown inclusive of VAT. The Committee of Advertising Practice takes the same view.

The complainant, a member of the public, challenged whether a “savings” calculator on the Purplebricks site was potentially misleading.

The calculator now displays “plus VAT” alongside the percentage figure charged by an agent. This was previously absent from the Purplebricks website.

Nevertheless, on the previous calculator, the “savings” made by the seller were based on an estate agent’s fee including VAT – although this was not made clear.

The complainant said this made the savings look misleading. He told the ASA he expected the estate agent’s percentage fee to have included VAT.

The complaint resulted in Purplebricks agreeing to amend the savings calculator, and on that basis the ASA decided that the complaint had been informally resolved with no further action needed.

However, the complainant has told EYE he is astonished that the ASA feel that the amendment is sufficient, in relation to both the Committee of Advertising Practice Code and previous rulings by the ASA.

Both the CAP Code and the ASA have laid down that estate agency fees should be shown inclusive of VAT.

The complainant said: “In my opinion the percentage agency fee used on the Purplebricks website should be adjusted to be inclusive of VAT and the savings calculator amended accordingly.

“If an agent wished to place an advert saying that their fees were 1.5% + VAT this would not be allowed so I’m struggling to see how Purplebricks can be allowed to use a percentage fee in this manner on their website.”

An ASA spokesperson said: “A member of the public challenged whether a savings calculator on the Purplebricks website showing a sliding percentage value was misleading as elsewhere on the website it stated that savings and prices included VAT yet the calculator appeared to not include VAT.

“We contacted the advertiser who agreed to amend the ad to make clear that VAT was in addition to the percentage value stated.

“We considered no further action was necessary and closed the case on an informal basis.”

A separate complaint was made about Mov8 Real Estate, a Scottish firm of solicitors and estate agents.

The complaint, by McEwan Fraser Legal, challenged a claim that “On a £200,000 property you save £1446 versus 1% plus VAT estate agency fee”.

McEwan Fraser Legal, who understood that the savings claim did not reflect the cost of services that were included in traditional estate agent fees, challenged whether the claim could be substantiated.

Mov8 said the claim was a simple comparison between their estate agency fee and that of an estate agent charging a 1% commission fee plus VAT for a property worth £200,000.

It believed that the basis of the comparison was made clear in the ad and that the comparison did not purport to compare the overall cost of selling a property, only the estate agency service.

The firm explained that none of its additional fees were compulsory because each customer had different requirements; for example, some customers decided not to opt for advertising and marketing services. Mov8 also said some additional costs were legal requirements that would have to be acquired by third parties and, as such, Mov8 recommended their customer trust their instruction.

Move8 told the ASA that future ads will make it clear that additional costs may be applicable to its estate agency fee.

An ASA spokesperson said: “On this basis, we considered the case closed informally.”

PB