The Committee of Advertising Practice (CAP) has warned of “repeat problems” with estate agency promotions in a notice that warns of targeted enforcement action in the sector next year if things don’t improve.
The warnings come in an enforcement notice issued by the CAP, which lays down the advertising rules enforced by the Advertising Standards Authority.
A spokesman for the ASA and CAP said the aim of the notice is to put agents on alert that they could be set for an ASA ruling against them or Trading Standards action for the most serious cases where there is failure to comply.
The CAP said in the enforcement notice, issued to all agents via industry regulator NTSEAT (the National Trading Standards Estate Agency Team): “We have noticed repeat problems with property sector advertising and wish to draw your attention to these issues with the following guidance.
“Please take immediate action to ensure your ads comply.
“If we see continued problems in this area, we will take targeted enforcement action in the property sector in 2018 to ensure a compliant level playing field in this market. This may include – where advertisers are unwilling or unable to comply – referral to our legal backstop, Trading Standards.”
CAP guidance accompanying the notice highlights the main areas where there have been issues with agency adverts, including the explanation of fees, property descriptions, savings comparisons and claims of local expertise.
The notice said any qualifications or exclusions to advertised fees should be made clear. It cited a complaint that had been upheld against online agent HouseSimple for a TV advert stating “sell your home for just £495” as it was not clear that this service was only available to those who used its mortgage and or conveyancing service. HouseSimple was told the ad must not appear in the same form and must make the price distinction clear.
In another example used, Pink and Cow estate agents had a complaint upheld against it for text on its website that said “sell your home for 0.5%” on its home page alongside services that said “we’re in the perfect position to show buyers round your property”. However, it transpired that it would cost extra to have accompanied viewings so the agent was told to amend the website.
The CAP also says it continues to see adverts with VAT-exclusive fees which breaches its code.
The regulatory body said: “Your fees should be VAT-inclusive. This applies to both fees presented as numbers (e.g. ‘£1,200’ is ok; ‘£1000 + 20% VAT’ is not) and as a percentage commission (‘1.8%’ is ok; ‘1.5% + VAT’ is not).”
The notice also warns about portal descriptions, highlighting an upheld complaint against Ashbury Residential in June 2017 after a Rightmove listing had described a property as having “private and secure parking” and “remote control gated access with CCTV” that it later transpired didn’t work.
The CAP said: “It may seem obvious, but don’t make claims about features of properties unless you can prove their accuracy with documentary evidence.”
The note mentions comparative savings claims as an issue, warning that such adverts must provide sufficient information about the services being compared.
It highlights a complaint upheld against HouseSimple in August where the online agent was ordered to remove claims it saved customers an average of £5,000 in fees.
The CAP said: “Comparisons with identifiable competitors are allowed as long as they are based on objective criteria and are presented in a way that is unlikely to mislead.
“All comparisons must be verifiable.
“Remember, you must hold up-to-date substantiation to support all claims that consumers are likely to regard as objective and are capable of objective substantiation. Savings claims must be supported with comprehensive documentary evidence; a simple customer survey will not be sufficient.”
Lastly, the note turns to the use of the phrase ‘local experts’ in promotions.
It cited a ruling against Spicerhaart in February 2015 for suggesting that it had physical branches in places where it did not, as well as a complaint about whether Purplebricks’ use of the term local property experts was misleading, which was in the end rejected by the ASA.
The CAP said: “It is acceptable to refer to ‘local’ property experts if you can prove that the expert has relevant knowledge and experience within the defined geographical area.
“But do not imply you have physical branches in locations if that is not the case.”
https://www.asa.org.uk/uploads/assets/uploaded/8c24139e-3420-4566-babf1fa7d6ac62bd.pdf
Comments (33)
CD, it is not a matter of opinion it is a matter of fact and law. There is no law for estate agents to display the fees or commission for selling a property. Purplebricks and the call centre agents chose to start displaying fees, because they choose to do so, it does not mean everyone else has to follow suit. If someone wants to ask how much my I will charge them once I sell their property, i will tell them. There is no hiding of fees or anything else that we do. If a potential vendor wants to ask I will tell them that we dont charge them a penny unless their property completes. Nothing up front, no hidden fees, no credit agreements, no hiking in fees if the client doesnt use our recommended solicitor, no additional fees if they would like us to do the viewings.
Nice and simple, no clicking on the little (i) button to see the hidden extras!
>If we see continued problems in this area, we will take targeted enforcement action in the property sector in 2018 to ensure a compliant level playing field in this market
I’m not sure how the ASA are going to establish a compliant level playing field. Much of the misleading that goes on by traditional agents is done via anonymous twitter accounts and anonymously on sites like this.
Then there’s the misleading phone calls from traditional agents when you have a property listed with one of the Online Agents.
God knows what nonsense is being told to homeowners when traditional agents go around to value a property. Probably understating the probability of selling based on some dodgy analysis by somebody with a vested interest. Or quoting a single negative review on TrustPilot.
All the time misleading the public to make transactional decisions.
In order to promote a level playing field Trading Standards need to make sure traditional agents who advertise via their websites show how they arrive at their commission rates and tell owners they still have to pay the full commission when the owner finds their own buyer (if that’s the case). They should detail whether their rates are negotiable or not.
CD it is not a legal requirement for estate agents to publish their fees for selling a property. Purplebricks and the other call center agents choose to publish their fees because they want to come across as a cheap option. Once they have decided to post their fees, they have to abide by the law and confirm what their fee includes and what it doesn’t, this is where the ASA have constantly got involved. Estate agents websites are open to be reported to the ASA or whoever, but high street estate agents choose not to use websites and mass marketing to mislead the public
Estate agents for the main have sole-agency contracts, if a vendor sells privately then they dont have to pay the estate agent. If that vendor instructs a call center agent, and sell privately, is it fair that they should pay, no it isnt, but they have to pay anyway.
When i visit people at their homes, yes i do highlight the pitfalls of using call center agents, which are valid and correct points. I highlight that there are often other fees to pay beyond the headline fee, and in some circumstances have to highlight that the call center agents are pay anyway, not no sale no fee.
Re Twitter, i think you will find that my own account and the others that you are referring to are only highlighting customers that have had negative experiences, or posting statistics that well know websites are confirming to be accurate. As i posted the other day, i invited certain companies to pick me up on any errors by proving real statistics. One company contacted me and they were unable to do so.
Totally agree…..posting fees on websites was never about transparency….it was done purely to attract as many customers as possible. We also all know the fees are not the total truth, with the add ons, and that in many cases they are being subsidised by investors money. Add in the ‘smallprinted’ you have to pay whether you sell or not and it all adds up to #cynical marketing.
Totally correct, CD cannot defend that either……although im sure we will see a mountain of noise from him in response!
ArthurHouse02,
>CD it is not a legal requirement for estate agents to publish their fees for selling a property
I think this is a matter of opinion. In my view it’s a material fact that cannot be omitted before the consumer makes a transactional decision and let’s remind ourselves that the transactional decision we’re talking about here, both for online agents and traditional, is whether to arrange an appointment for valuation.
It’s true that TradingStandards have not given guidance that this is required to be on an Agent’s website but if we’re talking about creating a level playing field then perhaps they will change their guidance. Perhaps now that we have Online Agents, guidance needs to be ammended as beforehand everybody was on a level playing field in that the prospective client would find out the fee on presentation of the contract unless they asked.
Arranging an appointment for a valuation is not a ‘transactional decision’ as no money has changed hands.
Have they sold your house yet?
Your post seems to be a personal attack on High Street Agents, branding one, as all. Give it a rest, you are behaving like a TROLL and a response to your conduct.
About time someone got a grip on the scummers who illegally seek to gain an advantage over the majority that play the game fairly. Unfortunately, we all know that actual, real, genuine, enforcement won’t actually, genuinely, really happen. Pity……
Bet all the marketing people working on their next batch of #cynical advertising have looked at this article and thought to themselves ‘yeah right’ and then gone back to their work ‘now where was I…..’can save you tens of thousands’…..yea it’s tens of thousands of pence, but I can put the pence bit in the information box they have to click first to find out..no one will bother looking there….I’m just so good at this!
I saw an ex PB house yesterday and the owners claimed they went through 4 LPE’s in 9 months. I asked how many viewings, they said 1, in 9 months !!!!
How much did PB charge? Owners said : £1200 up front!
They don’t have a very high opinion of PB, I said had they tried to put a review on trustpilot. They said they didn’t know about trustpilot.
I think they are going to put their review on trustpilot and facebook and wherever they can now.
The usually culprits must be quivering in their boots. Anyway, we know any breach will be INFORMALLY resolved!
There should be a #Cynical Marketing Fest each year where participants meet and discuss how much business they managed to obtain from misleading advertising…..until unfortunately they had an informal ruling….or had to add a few words in concealed information somewhere.
Perhaps it could be a sponsored event….any suggestions?
Trustpilot
Is this ‘admin fee’ really a deferred payment fee and should, therefore, be promoted boldly and compellingly with £300 viewing service and the fee is payable regardless of sale?
I’m also surprised that Haart of (insert name of town here) is permitted because to me that indicates that they are from whichever town they use in the name which is obviously not true.
NTSEAT issued a similar warning last year (link below). Nothing was done. If a firm/ firms continually obfuscate and mislead in their advertising marketing material and contracts, it shows a clear intention to mislead consumers and gain business by deception. As NTSEAT itself said in 2016, this, if proven, is an offence under the Fraud Act. What will it take for the regulators to actually regulate?
http://www.propertyindustryeye.com/industry-regulator-warns-portal-juggling-agents-misleading-illegal-fraud/
What will it take for the regulators to actually regulate?
Probably a massive case with shed loads of publicity claiming they are not fulfilling their role properly.
Then, as ever in this country, they will just say ‘lessons have been learned’ and everything will return to the status quo of nothing being done.
The only way anything will ever happen otherwise is if it is incentivised, with fines imposed going back to the NTSEAT to fund further prosecutions!
Make being pro-active be financially productive……now where have I seen that work before?
>Nothing was done. If a firm/ firms continually obfuscate and mislead in their advertising marketing material and contracts, it shows a clear intention to mislead consumers and gain business by deception.
Not necessarily. If you accept that mistakes can be made then the more you do the more mistakes you will make which will give the appearance in your eyes of intent. Any assessment has to take into account the degree and seriousness of the problem rather than just continuity.
For example which is worse a company that lists 100,000 properties a year and has a 0.01% percentage of issues or a company with 2 properties a year and an issue with 100% of listings? The one with a 100 properties will appear worse because the problems are more regular but it’s a miniscule problem.
Also are the people making these complaints competitors who turn a blind eye to everybody apart from the online industry or perhaps members of the public connected to competitors? Again giving the impression of certain companies continually doing something when other don’t.
There are far more things for the regulators to take into account other than just whether something appears continuous. Whether they look into matters to the degree required is another question.
I don’t get what you get out of doing this Cyberduck46.
By the very nature of this site nearly every agent commenting will be good honest ‘best interests of their clients’ people. If they weren’t they wouldn’t waste their time commenting on here. Why would any rogue or underhand agents expose themselves to added risk of being found out, by posting on this site.
So in effect you come on an industry website to have a go at the good guys…..for what purpose? None of us are ever going to agree with what you believe or change our minds, because we all know the truth.
We all believe we charge non investor subsidised fair fees reflective of the amount of work we do, and the costs we occur in running our businesses.
None of us like the perpetuated propaganda that you can get a great Completed Sale result by paying less than its costs to have a good plumber spend a day changing your boiler……propaganda which is designed to destroy our small family supporting local community businesses in order to give a few people more wealth than they can spend in a hundred lifetimes.
BSOS23PC
AgentV,
I don’t post to have a go at people who post, who are very small in number, and persistently saying pretty much the same thing. I post for the larger group of people reading the posts.
When I was first directed to this site I was misled by what was being said. I still regularly see statements which I believe are misleading. At least with those that come on and post alternative opinions, readers will see an alternative opinion or two on occasion.
You have to be pretty stubborn to come back and post on here because you get personally attacked by some regular posters. Referring to you with insulting names and making things personal rather than staying on topic. No doubt in some cases it’s because they feel like I’m having a go at them but in other cases I think it’s because it is detrimental to an agenda to misinform using social media.
As a regular visitor and poster on here, I come to read the industry news and talk with others in the industry about mine and their views. I wouldn’t imagine this site is of any interest whatsoever to non industry members or members of the public……other than of course yourself and Dom.
It would be like me going to a Gastroenterology site to read up on consultant’s latest views on the role played by bifidobacteria in digestion, because I have a stomach upset.
But it would seem only when Purple Bricks is in the firing line!
These are all just words. The industry will only take notice when serious action is taken. These websites being referred to still have savings and savings calculators on them, taking about figures form last year or years ago. I have no doubt 2018 will come and go with more informally resolved cases and no actually meaningful punishment.
On HouseSimple website currently displayed is a saving of £5786. Yet nothing to accompany it as to how this saving was qualified. Dont wait until 2018, do something now!
‘Local property experts’
I think this term in itself is misleading. I never fully regarded myself as an expert in this business until I had five full years of experience at the ‘coalface’.
While you never stop learning in estate agency, I think the old rule of thumb holds true…..to get really good at something you need to spend 10,000 hours doing it . Shouldn’t a so called expert be really good at what they do? Shouldn’t they have the relevant minimum of five full years experience to be regarded as an expert?
Or can the ASA explain how they define a so called expert?
It was explained in the ruiling, so perhaps rather than ranting here take a minute to read it????
The LPEs examined had on average 12 years industry experience.
If one agent has 50 years experience and 10 franchisees have 10 days of training (0.37 years) that is an average of 4.9 years experience.
Chris,
Keep thinking along those lines and you will understand why you lost the case at the ASA.
PurpleBricks are allowed to use the term because the vast majority of LPEs are local experts. It is PurpleBricks’ advert not a particular LPE’s experience that was the issue.
Some of the LPE’s were perhaps not experienced enough to deserve the title but the ASA looked at the overall picture relating to the company. I’m sure its the same with any job title including Estate Agent.
If the overall picture had been that PurpleBricks’ agents didn’t have local knowledge and were inexperienced then the Adverts would have been misleading.
I hope you can now put this behind you.
Cyberduck46 “PurpleBricks are allowed to use the term because the vast majority of LPEs are local experts”. Then surely that’s what their ads should say rather than claiming they all are. Also, the “local” is questionable in many cases.
No, because the complaint was about using the title “local property expert” and whether this was misleading. It wasn’t a complaint about PB saying that all agents were local and expert.
A subtle but important difference.
If the ASA had ruled in Chris Wood’s favour PurpleBricks wouldn’t have been allowed to use the “term local property expert” which I’m sure was his aim. His mistake was assuming that everybody needs to live up to the assumed meaning of a job title.
We’ve been through this before Dom. The LPEs who PB chose to submit CVs for had indeed av, 12 years experience. We don’t know about the 300+ others whose CVs PB did not submit.
Totally agreed…..if I have 10 years of experience and my co worker has one, and we average 5.5 years between us, it doesn’t make my co-worker an expert as well, does it?
Also an ‘expert’ should be based on an individual’s experience, not on a collective blanket title.
Interesting.
I assume this covers the situation where negotiators are forced by their management to recommend panel lawyers.
“We recommend ‘our’ conveyancing service because they give great service” when they know full well that they are anything but … Sounds like time to call in trading standards…