The Competition and Markets Authority has released its latest update on the estate agency ‘cartel’ in Berkshire.
In June, the CMA found four agents provisionally guilty of breaking competition law. They are Romans, Prospect, Richard Worth and Michael Hardy.
The alleged cartel took place over a period of almost seven years from September 2008.
This morning, the CMA said:
Three Berkshire estate agents have been fined more than £600,000 for illegally fixing the minimum commission rates they charged their customers.
The move comes after the CMA found that the companies, Michael Hardy, Prospect and Richard Worth, together with a fourth company, Romans, broke competition law by taking part in a price-fixing cartel, which began in September 2008.
For almost seven years, the four companies conspired to set minimum commission rates for the sale of residential properties in Wokingham, Winnersh, Crowthorne, Bracknell and Warfield – where they were the leading estate agents at that time. This involved the firms exchanging confidential information on pricing and holding meetings to make sure all members enforced and maintained the agreed minimum rates.
The result was that local home-owners were denied the chance of securing the best possible deal when selling their property because they were unable to meaningfully shop around all their local agents for better commission rates.
Romans will not be fined as it brought the illegal activity to the CMA’s attention and fully cooperated with the investigation, under the CMA’s Leniency Programme.
Michael Grenfell, Executive Director of Enforcement, said: “It is disappointing we’ve found yet another case of estate agents breaking competition law.
“We trust that the fines issued today will reinforce our message that we expect the sector to clean up its act and make sure customers are not being ripped off in this way.
“The industry needs to take note: this kind of behaviour will not be tolerated. If you break the law, you risk similar consequences.”
Michael Hardy is being fined £142,843, including a reduction of 10% because the firm admitted being part of the cartel.
Prospect is being fined £268,765, including a reduction of 50% under the CMA’s leniency programme and 10% for settlement.
Richard Worth is being fined £193,911.
This morning Prospect said:
“Prospect has been supporting the CMA with its investigation and has had in place for a number of years a rigorous set of policies and procedures to fully ensure compliance for all regulations covering the estate agency industry.
“We accept the CMA’s findings and have been able to learn from our past mistakes, from years ago. Prospect has since implemented internal policies, which as a company we believe illustrates that the customer and their satisfaction are of paramount importance to us.”
Michael Hardy said:
“Having had an opportunity to fully review the findings and make representation to the CMA Michael Hardy estate agents accept the statement as an accurate reflection of events. A very poor decision was made and it is difficult not to conclude that a line that should not have been crossed was.
“The events are historic and since that time robust procedures have been put in place to ensure that all staff are fully aware of the rules surrounding cartels and the fixing of fees. All staff have signed a competition law code of practice document, a copy of which is on our website.
“Some will be disappointed by these revelations. I offer my sincere apologies to you. Anybody who has dealt with Michael Hardy will know that we were not in 2008 nor are we today the cheapest estate agents. But we have always believed, a belief that is borne out by numerous comments from our clients on Feefo, that we have offered good value for money. We take pride in going the “extra mile” and will continue to work tirelessly to sell the properties that our clients ask us to sell on their behalf.”
EYE NEWSFLASH: Four top agents named in latest ‘cartel’ case
Comments (15)
Yet another occasion where agents are criminals.
No wonder the public think they are the most untrustworthy profession.
These fines seem remarkably high given the relative turnover/profitability in this industry.
Okay – they broke the rule. Thou shalt not conspire.
But for crying out loud…
“…local home-owners were denied the chance of securing the best possible deal when selling their property because they were unable to meaningfully shop around all their local agents for better commission rates.”
Utter ********.
Why is it that CMA believes “better commission rates” equates to “the best possible deal”? If an Agent gives up some of its’ Fee – then something has to give somewhere to compensate. Yes – their profit line could take the hit – but that’s not why they are in business. Something else is more likely to suffer.
Would they have to cut back on marketing – which could have a detrimental effect on the end result for their client?
Would they resort to employ less experienced and able staff for less money – potentially resulting in lower offers being negotiated from seasoned buyers hungry for a bargain?
Would they simply go down the ‘sell quick and low’ route, to increase turnover in an effort to make up the shortfall?
Have Agents not a duty to themselves and their staff to protect their business?
Is it expected of them that they will take on business that is unprofitable in the name of “competition”?
The Agents agreed MINIMUM Fee levels – not maximum.
They were all in competition against each other – and all other Agents in their respective patches. They would have set a Fee knowing well and good that other Agents in their patch would undercut.
Instead – they agreed to stick out for what they felt they were collectively worth – effectively giving other Agents a distinctive competitive advantage for those homeowners choosing an Agent on Fee.
If only NTSLEAT, TPOs, NAEA and other ‘industry bodies’ took action at the slightest hint of Agents acting in inappropriate ways…
I knew you wouldn’t agree with the ruling. Are you aware of the rules governing your industry?
This is a “rule” as you put it governing ALL industry – not just Estate Agency.
Hasn’t the gin taken effect yet? You perform much better under its’ influence.
I’d have waited for it to kick in if I’d been you…
It’s an odd one ……not a innocent Whistleblower who observed, but one that was engaged at the scene of the crime? Punishment all round regardless.
Amazed that Agents actually co-operated and got on with each other? Must get some other reward than a large fine.
Blue Peter Badge?
Whilst in no way condoning the actions of the four agents – am I the only one who finds it rather irritating that Michael Grenfell states that, I quote, “It is disappointing we’ve found yet another case of estate agents breaking competition law.”
By implication he is stating that a large number of agents break competition law – clearly from relatively few cases that we are aware of this is simply not the case. Another example of bureaucracy bashing the estate agent
A large number of High Street agents are corrupt and break the law. Backhanders from investors, conditional selling of financial services, misrepresentation of offers, lying about their performance to gain an instruction and charging thousands for doing nothing more than advertising their customers homes on Rightmove and waiting for the phones to ring (please don’t pretend you progress the sale because calling another agent and asking them for an update isn’t sales chasing). Highwaymen in cheap suits.
Spewing your bile like that is not going win you many friends on this website Michelle. But of course you know that, which is why you do it. Spew away, we really don’t mind at all. Because when someone does it repeatedly they lose all credibility. Which is precisely what you have done.
My mistake.
Looks like the gin has kicked in after all…
Oh I don’t know – her typing seems quite coherent on this occasion and it is early in the evening. See what she’s like if she returns later in the evening.
Prepared to put your red, bumpy nose on the line by naming names? Nah, thought not.
I agree.
They spend 7 years being part of the Cartel but get off for free at the end?
Bad form any agents doing this but does not sit well Romans are grasses and get away with it.
In 2016 Romans were bought by Leaders. I would bet the £600k fine for the others that it was Leaders that made them ‘fess up, otherwise it would be business as usual.
I’ve had dealings with three different Leaders offices and they are as straight as they come.