A three-pronged complaint by Hunters against Purplebricks has been upheld by the Advertising Standards Authority.
However, Purplebricks said the complaint had been informally resolved four months ago, that Hunters appealed the matter a day later, and that it will appeal the decision.
An informal resolution always suggests that the case is closed and Purplebricks will be asking why it was re-opened after, it claimed, the agreed amendments were made on its website.
The latest case is published this morning. Hunters complained about an advert on Purplebricks’ website seen last October, which had text on its home page stating “Instruct us to sell for £849”.
Smaller text below stated “£1,199 in London and surrounding areas”.
Next to that was an icon which, when hovered over, revealed text saying: “If you choose to take advantage of our viewings service, which covers all viewings, there is a one off fee of £300.”
Additional text on the home page stated: “How much could you save?”, “Your savings” and “Our standard fee £849”, next to a comparison tool which let the consumer input information as to their selling price and the estate agent’s commission.
Next to the “Our standard fee £849” text was an icon which, when hovered over, revealed text which said: “This is our standard fee for everywhere outside of London and surrounding areas, where we charge £1,199 inc VAT. Around 40% of our customers pay us a fixed fee of £300 to cover ALL viewings.”
Hunters, which said it believed the average fee paid to Purplebricks was higher than £849, challenged on three grounds:
- “Instruct us to sell for £849”;
- The savings claims generated by the infographic comparison tool;
- The advert was misleading because it did not make it clear that the fee had to be paid whether or not the property was sold.
In its response to the ASA, Purplebricks said it was a disruptive force in the estate agency market. Since launching in 2014, the average fee charged by traditional agents had fallen from 2.14% to 1.5%, partly in response to its lower fees.
Purplebricks said it was the first estate agent to reveal its fees transparently on its website: it had recently commissioned research among over 1,000 estate agent offices and found that 93% did not reveal their fees.
Purplebricks said £849 was what most of its customers paid to sell their property. In and around London, they paid £1,119. Around 40% paid the optional £300 for viewings.
Regarding the infographic, Purplebricks said it included an asterisk which prompted consumers to seek further clarification on optional charges and that the fee was always payable. It had included this after earlier discussions with the ASA.
However, the ASA upheld all three of Hunters’ complaints.
It said that the wording “Instruct us to sell for £849” was likely to mislead. People would think that conducted viewings would be part of the price, as they are at traditional agents.
The extra £300 payable for a viewings service was, said the ASA, “material information” likely to influence consumers’ decisions as to whether to use Purplebricks.
It was not enough to put information about the viewings service in a ‘hover’ box.
On the subject of the comparison tool, because the £300 viewings service was not included in the Purplebricks fee, the ASA also found this was likely to mislead consumers about the savings they might make when using Purplebricks.
The ASA also agreed with Hunters’ challenge that Purplebricks did not make it clear that the fee was payable whether the property sold or not.
The ASA said that traditional agents only charged in the event of a successful sale. In the absence of information to the contrary, members of the public would assume that Purplebricks worked in the same way.
The ASA said that the advert should have made clear that the fee would always need to be paid, even if the property was not sold and potentially before any sale was complete. Because it did not, it was misleading.
Purplebricks has been told that it must make it clear “immediately and prominently” that the viewings service has a separate fee in addition to the £849 standdard price, and that fees would always be payable whether or not the property sold and potentially before a sale was complete.
Purplebricks has also been told that its comparison tool must be accurate, and give consumers the option to include the additional £300 viewing service.
However, this morning Purplebricks hit out at the ruling.
It said: “We are extremely disappointed with this ruling change and the process adopted.
“The complaint, which came from a rival estate agency, was resolved four months ago in partnership with the ASA, made public by them and mutually agreed minor changes made to our website.
“We were surprised when, only a day after reaching this agreed position and announcing it publicly, the same rival estate agent appealed this decision and their demands were met by the ASA. We believe this is unprecedented and unfair. We will appeal the ruling.
“At Purplebricks we strive to ensure industry leading levels of transparency by offering customers certainty of what they will pay to sell their house before they go on the market and a choice around whether they pay for our viewings services or undertake the viewings themselves.
“Our customers know their homes best and 60% of them choose to show potential buyers around themselves and save some money. Those who are too busy, or who prefer to leave it to our experts, pay a one-off £300 viewing fee to cover unlimited viewings.
“Customer choice has been a clearly communicated mainstay of our proposition and will remain so in the future.”
A spokesman for Purplebricks told EYE that there was “hypocrisy” in the industry and that Hunters does not display its fees, or how long its customers are locked in for.
He said: “The simple truth is that there is a real hypocrisy here when you bench mark our level of disclosure with our competitors who are complaining to the ASA. PDQ properties have the same limited level of disclosure but no doubt that won’t stop a high degree of grandstanding.”
Glynis Frew, chief executive of Hunters, told EYE: “We welcome the new competition online agents bring but do think it’s important that we all operate on a fair and level playing field.
“We think the ruling does help to clarify the actual position and thank the ASA for their attentions.
“It does seem at times that Purplebricks are being allowed to build their business on a false premise and it is only after complaints from the public, industry and features in the media that the public is gradually being made aware of the implications of what is undoubtedly a pay-up-front option.”
Purplebricks has had a number of brushes with the ASA. In October 2017, a complaint by CIELA (Charter for Independent Estate and Letting Agents) that Purplebricks did not make it clear that a fee is always payable was upheld.
An informally resolved complaint about Purplebricks’ website, challenging whether a claim about its standard fee of £849 could be substantiated, was reported in February this year by outlets including EYE. At the time, the ASA did not name the complainant.
Purplebricks’ website, as it looked yesterday, does refer to the viewings service at £300, and says the fee is payable on instruction or can be deferred
Comments (38)
“In its response to the ASA, Purplebricks said it was a disruptive force in the estate agency market. Since launching in 2014, the average fee charged by traditional agents had fallen from 2.14% to 1.5%, partly in response to its lower fees.”
Seems to me that the response was typically lacking in basic honesty and transparency. Some might think this be a more accurate account of the situation:
“Since launching in 2014, the BASIC fee charged by PurplebBricks “regardless of sale”* has increased from £599 to £849 – and a hefty £1199 if you happen to live within a 9 million megaton blast radius of London, wholly in response to the fact that the fees weren’t sufficient to pay basic costs never mind turn a profit. Despite that disgustingly huge 41.7% increase, the fee itself still isn’t putting the ‘P’ into ‘P&L’ – but that’s what investors are for, innit.”
* “regardless of sale” – this is the uberambiguous phrase added to some of but certainly not all of PurpleBricks’ advertising following the ASAs ruling of 18/10/2017 that “when making a comparison to other fee models in their ads, they made it clear that their flat fee was always payable.”
Now it could be debated day and night whether ‘a reasonable person’ – the accepted requirement for these things – would understand from the actual phrase now used (sparingly, sometimes) “Fee payable regardless of sale” that if they did not sell their property through PurpleBricks or removed it from the market with them for any reason that the fee they had paid (or had entered into a NOT Loan Agreement for) would not be refunded (or still liable for payment to the NOT Loan company).
If a hundred thousand polls were carried out of a hundred thousand people each, then we would get a hundred thousand different statistics to argue the toss over.
BUT… I would suggest that the current wording doesn’t do what it says on the tin. In fact, no – I would state that categorically. Like the wording used, me saying “I would suggest” is way too wooly and open for misinterpretation.
“Fee payable regardless of sale” IS NOT GOOD ENOUGH. Unfit for purpose. Designed to confuse and hide the true meaning.
.@ASA_UK need to look at this again. Hey – they may well be already… next week’s ‘naughty-step list’ could see our #Purple_Pals back up there getting their wristies slapped for the dozenth (I know it’s not a real word) time in less than three years. Surely something as materially important to a potential customer of a company is the fact that they are ONE HUNDRED PERCENT committing themselves to costs for using a service.
Something like this would do it:
“ALL PURPLEBRICKS FEES (INCLUDING ANY THIRD PARTY COMMISSIONS AND VIEWINGS PACKAGES) YOU AGREE TO PAY ON INSTRUCTING TO MARKET YOUR PROPERTY ARE STRICTLY NON-REFUNDABLE AND SHOULD PURPLEBRICKS NOT SELL YOUR HOME YOU WILL BE OUT OF POCKET BY THESE AMOUNTS.”
And then… how’s about they put their metaphorical male chickens on the block and add this:
“PRIOR TO INSTRUCTING PURPLEBRICKS TO MARKET YOUR PROPERTY, YOU WILL RECEIVE A CURRENT STATEMENT OF NATIONAL, REGIONAL AND LOCAL STATISTICS SHOWING PERCENTAGE OF PROPERTY SALE COMPLETIONS vs INSTRUCTIONS RECEIVED FROM INDEPENDENTLY VERIFIED DATA COMPILED USING ALL LISTINGS FROM JANUARY 2015 TO (12 MONTHS PREVIOUS DATE), AS AN INDICATION OF YOUR RISK LEVEL BY PAYING AN UPFRONT, NON-REFUNDABLE FEE.”
When the PB adverts – ALL OF THEM, in every format there is – tell people exactly how it is then I’ll start believing they actually want to be what they now purport to be.
I’ll not hold me breath…
I would also remind readers that, in the early days that PB have drawn attention to (pre 41.7% hike of their “Fee payable regardless of sale” NSPR charges), they also operated a “100% MONEY BACK GUARANTEE”.
Discuss.
Wot? No Dom & Ducky Show today?
Diiiiiiisssssssaaaaaappppppoooooiiiiiinnnnnnttttttteeeeedddddd! NOT.
We’ve had quite a lot of debate about fee erosion and investor subsidised loss leader fees, I’m not sure losing a wedge on every deal is predatory.
Has nobody reported them for their continued use of radio advertising to get a message across that they seemingly don’t charge at all to sell your house?
“In its response to the ASA, Purplebricks said it was a disruptive force in the estate agency market. Since launching in 2014, the average fee charged by traditional agents had fallen from 2.14% to 1.5%, partly in response to its lower fees.”
There is no doubt that PB and the other Onliners have contributed to reduced average estate agency fees in the last few years. This has been a true disruption to the industry and has caused major damage. In fact, it is the biggest threat to our industry right now.
However, it is somewhat of an unlevel playing field as high street agents do not have the deep pockets to reduce their fees to similar levels (unlike the Onliners). Some High Streets have tried with low fees (Countrywide) but it has been damaging for any business bothered about a healthy P&L. You cannot run a successful, profitable estate agency charging what the Onliners are. We are in very strange times right now and there will be a bubble bursting within the next 1-2 years where we will see most of the Onliners disappearing. It is not a sustainable business model. Emoov and Tepilo merging in many peoples’ opinions is a desperation play due to spiralling overheads, loses and lack of growth despite the millions upon millions thrown at them.
In all the discussions on PIE I don’t think I have ever seen Predatory Pricing mentioned.
This is a definition – Predatory Pricing occurs when a firm sells a good or service at a price below cost (or very cheaply) with the intention of forcing rival firms out of business. Predatory pricing in the UK is illegal. It is prohibited under EU Competition Law to sell goods at a loss with the purpose of forcing other firms out of business.
11 times in 3 years !!
https://www.thetimes.co.uk/edition/business/online-estate-agent-misleads-for-11th-time-in-three-years-5zvx87ctj
What about their £360 deferred fee payment if their users understandably decide not to use their conveyancers (conditional selling)?
https://uk.trustpilot.com/review/ezie-eclient.co.uk
Should this be added to the fee as proper traditional agents do not charge to defer payment- Like for Like?
Why is VAT quoted as part of this fee and not mentioned in their sales fee ie including VAT as all bills are sent and banked by PB and not their ‘self-employed’ LPE’s?
Should a billion pound listed company be VAT registered across the board if so does their fee include 20% VAT?
If VAT is quoted and payable for deferring the fee is this fee payable to separate conveyancing company/s thereby denying PB’s independent shareholders a huge income stream?
What company receives their eye-watering conveyancing referral fees?
If these fees are added to PB’s income when combined with their viewing fee and London and surrounding area surcharge why is their average fee only circa £1,100?
The average property price north of the central divide (around 2/3 of the UK) is circa £180,000 so why are they able to default to an average property price that is substantially increased by much higher prices in the South to £280,000?
Surely, there should be regional variations based on RM stats?
Do PB state that the £300 viewing fee is payable regardless of whether any viewings take place or the LPE or assistant is unable to attend?
‘Proper’ traditional agents do not charge for failure, should PB be more transparent and prominently and equally promote the fact that they charge regardless as part of their fee promotion and not buried in small print?
Is purple the colour their users turn when they are pursued by a loan company for failure to ‘Sell’ and may also have to pay the ‘additions’ above?
Like for like = £849 + £300 viewing + £300 deferred fee payment = £1,449 payable regardless of sale plus VAT if applicable less any financial incentive to actually complete on a deal?
The only incentive PB has in selling the property is their cut from the enforced inflated conveyancing charge – which is not mentioned on any advertising, nor do they mention that their LPE is in fact a self employed person with limited training and no guidance from working with an experienced Agent / Valuer.
Their nominated Conveyancing service is a joke, with no response to telephone messages or emails from their vendor client, any Agents chasing the chain, or the Solicitors on either side of the chain.
Thankfully they have attracted very few vendors in my area, but on a recent transaction their solicitor took over 12 weeks to exchange and our vendor client said “If we ever move again we won’t take an offer from anyone selling their home with Purple Bricks”.
A welcome first post (unless I have missed others – in which case I apologise for not ‘clocking’ you sooner!).
Interesting posting name. Are you sure ‘singing agent’ is best descriptive?
More like STINGING agent!
I like you already – a lot!
Keep posting. We could have fun.
“A spokesman for Purplebricks told EYE that there was “hypocrisy” in the industry and that Hunters does not display its fees, or how long its customers are locked in for.”
B0LL0CKS, Mr ‘Spokesman’ – and you know it!
There is no hypocrisy that you can show. If an agent does not disclose information, then it has nothing to justify and nothing to stop it from criticising or reporting a competitor that does disclose information that is believed to be false or misleading. In fact, it is good practice and the ASA has evolved from a process of ‘self-regulation and co-regulation’ – which this case (and all the others) are prima facie instances of – our industry keeping its’ own ‘members’ in check when they step out of line on the advertising/promotion front.
It is then up to ASA to determine whether the complaint is justifiable and that the reported issue is false or misleading to a material degree in which case it can slap you on the wristie time and time again (as it has done now a dozen times according to the ASA website this morning), and allow you to modify the pixel count of a full-stop in your offending advertising until put back on the naughty step – or to actually #DO_SOMETHING… which amounts to not much more than the wristie-slap in reality, but again according to the ASA website, “some of the sanctions at our disposal can have negative consequences.”
Really, @ASA_UK?
SO USE THEM!
Arn’t the words “Instruct us to sell for £849”. also misleading?
Particularly if they don’t sell
Speaking as one of Purplebricks chief competitors, PDQ is confused but flattered by the mention in a complaint that has nothing to do with our business empire. (This post has been approved by our entire legal team, PR consultants, the board of Directors and CEO following numerous meetings).
I see the anti-Chris Wood / anti-Robert May person is busy thumbdowning but not posting, cat got your tongue?
I suspect karma has silenced them rather than the cat
Never mind the fundamentally massive difference between “marketing” and “selling” that differentiates the online model versus “regular” agents! But heaven forbid the ASA should ever point that out…
You would think “Instruct us to sell for £849” would entitle 50% of their customers to a refund !
Some would say it does!
Assuming you weren’t in the industry, if someone claimed they would sell your house for you for a fee, would anyone expect to have to pay if they then didn’t?
I am quite suprised they aren’t worried about one of the PPI claims companies starting down this route. Or maybe it is the individual LPE businesses that would end up being chased.
Well done Hunters, we need more of the big boys doing the same as its the only way anything will ever change!
correct. Be nice to read property mark got off it’s **** and complained one day. Or rightmove stopped advertising due to breeches in misleading the public .
Hats off to Hunters in my opinion!
It’s all just part of the game isn’t it. It’s just like the World Cup…..rugby tackle people in the box on corners as long as you can get away with it…throw yourself over in a heap holding your head after someone brushes past you……anything to gain an advantage at any cost!
It’s not honourable, but do they care in the slightest?
It will only stop when ‘getting away it for as long as you can’ has more implications than the advantages you have gained in the meantime.
What about, for instance, if every vendor that claims they were misled, were entitled to a full refund of what they had paid?
Would that not also be fair to the customer?
yep it’s like a game to them . Not funny for the people losing jobs and the nhs with less tax to spend as it’s being used for more fake adverts in las Vegas.
PurpleTricks pull more rabbits out of the hat than Paul Daniels in his hey day.
Seeing as most high street agents include accompanied viewings as standard the Tricksters should be told to add £300 to their £849 fee and make £1149 their standard fee – with £300 off if you do your own viewings.
Aahhhh Trickery…. the feeling you get when you find out exactly what PurpleTricks really charge.
‘At Purplebricks we strive to ensure industry leading levels of transparency’ says the spokesman.
5 upheld rulings and 9 informal resolutions by the ASA suggest otherwise!
Why does the Purplebricks spokesman quote ‘PDQ properties’ in their statement? The complaint was from Hunters.
Somebody obviously has the ability to rattle their cage!
If Purplebricks are dead keen on being transparent why is making clear what they really charge a problem?
And for clarity, every vendor knows exactly what they will be paying when they sign a contract to go on the market. They know what our fee will be, they know that if the property isnt sold they wont pay, and they know that 10 months down the line “The boys” wont be banging on the door demanding payment.
Purplebricks, about as transparent as a lump of coal.
Can someone write an editorial that we can send to our local rag about how many times pb get ‘warned. I expect public would like to know the real fee they get is closer to £1100 . This would be fine if it wasn’t pay any way.
‘Since launching in 2014, the average fee charged by traditional agents had fallen from 2.14% to 1.5%, partly in response to its lower fees.’
********.
They keep misleading but the regulators continued to turn a blind eye.
Figures from their own conveyancing partner showed it was considerably less than that (1.3% and falling) two years ago but, ‘oddly’ Purplebricks continue to choose to ignore this.
The regulators don’t have the cash to back up their commitment to regulate. The legislation process costs money they don’t have so unfortunately they’re reduced to being regarded as weak ineffectual teachers; the good kids behave but the aggressive remedials play up knowing there’s no sanction beyond sitting on the naughty step for 5 minutes and being asked politely not to do it again.
#fakenews rats.
Robert,
Surely, if the ASA had any teeth, and started to fine these large companies for blatant disregard for advertising standards, then the money would either start to roll in, or the companies would simply fall in line with current advertising standards.
In relation to falling fees – I have to agree – many have started locally to reduce their fees – not sure how this will be profitable in the long term as many of them are lower than PB !
I don’t consider the ASA to be a regulator. All that effort for “Soz! won’t do it again” Have they gone yet?
“Yeah, yeah, yeah, Sorreeeee I did it again, my bad!” Gone yet?……
The attitude the disrupters have towards regulation and this is a quote I heard along with 4 or 5 other agents invited to a networking meeting . “if the rules do not suit favour the investment ignore the rules or break the rules”
The arrogance beggars belief!
The arrogance beggars belief!
But at the same time is totally unsuprising.
As long as you can make or attract money, you can get away with almost anything to help you do it…..as those who don’t want to be like that get pushed out or crushed. Then you just keep going until someone in authority tries to stop you….you then just say ‘oops, sorry’, brush it aside, appear to make concessions, and then just gradually go back to what you were doing before.
In the meantime you have made ten fold, hundred fold, thousand fold what it will cost you if you ever get fined!
BSOS23PC
The ASA is a self-appointed quango that has no legal jurisdiction or mandate; merely an ability to embarrass a firm and suggest a course of action, they cannot enforce despite having ‘an enforcement team’. Their only sanction, as stated on their website, is to refer a case to trading standards.
This is not to say that they are not a useful guide or conduit to settling a concern. However, it remains a fact that, unlike local or National TSOs’, they are not a regulator. Something readers may wish to consider if they wish to short-circuit a complaint in future.