Complainant to advertising watchdog ‘surprised’ at decision allowing agent’s fee to be shown plus VAT

| Rosalind Renshaw

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

x

Email the story to a friend

More top news stories



23 Comments

  1. Frown Please
    August 31, 2016 at 07:16

    How is everyone else supposed to play fair when the rules are being bent for these guys now. No need for them to break them when we can change them for them.

    Report
    1. PeeBee
      August 31, 2016 at 08:35

      Just imagine how ridiculous it would be today if all these members of the public hadn’t come forward over the last couple of years and made their entirely justifiable complaints to ASA, TS, etc – which have, without exception I believe, been “informally resolved”…

      Report
  2. jonJames43
    August 31, 2016 at 08:12

    What a farce. Absolutely disgusting. It is just not fair. The good agents get penalised  for abiding by the rules whilst Purplebricks do what they like.

    Report
  3. PeeBee
    August 31, 2016 at 08:31

    WOW!!! an ‘informal closure’.

    Now THAT’S a rarity…

    Report
  4. PRman
    August 31, 2016 at 08:35

    Strange that the ASA can over-rule HMRC, which insists that all business-to-consumer prices must include VAT. Hopefully quoting an ASA ruling won’t save Purplebricks when the VAT man comes knocking. This decision shows how out of touch the ASA can be.

    Report
    1. Thomas Flowers
      August 31, 2016 at 10:41

      Mmmm….makes you wonder how many of PB’s ‘ Self Employed Property Experts’ are VAT registered? This opens up a can of worms.

       

      Report
  5. mrharvey
    August 31, 2016 at 08:49

    Why is everything “informally resolved” nowadays?

    WHAT ARE YOU FOR?

    Report
  6. Robert May
    August 31, 2016 at 08:54

    The law, losses and lies have a tendency to catch up with wrong-doers, charlatans and spivs.

    Report
    1. Frown Please
      August 31, 2016 at 09:54

      unfortunately they will have harmed the industry too much by then!

      Report
      1. Robert May
        August 31, 2016 at 10:35

         

        The industry isn’t being harmed by the collective 2% silt at the bottom of the pond, the industry is going through one of those economic contractions where what agents list is more important than how many they list.

        Anyone who went through 1988-1994 market should have learned what to do and how to handle this market. Yes it’s going to be hard but  this is where experience, wisdom and bravery is worth more than money.

        Report
  7. PeeBee
    August 31, 2016 at 09:12

    WOW!!  Looks like someone’s got their mouse permanently hovering over ‘Dislike’ today…

    #truthhurts

    Report
    1. Robert May
      August 31, 2016 at 09:41

      Pity they don’t do a GCSE in hitting the dislike button; they could honestly claim to have a qualification!

      12 years of education and their best attempts at communication is hitting the dislike button.

      Report
  8. Keyser Söze
    August 31, 2016 at 10:54

    People often get confused with who the ASA actually are and what powers that have.

    The ASA is not an authority and has no power to enforce legislation. The ASA are self-regulatory and funded by a voluntary advertising levy made by LARGE advertisers.

    They give the impression they are a government body but they are a private limited company and do not disclose who funds them.

    They punish advertisers through negative PR as they don’t have the power to issues fines or sanctions.

    No more than a slap on the wrist in my opinion. I’m sure the upper echelon at PB wouldn’t bat an eyelid at an ASA complaint.

    Anyone fancy contacting to the ASA complaining that they find the ASA’s website misleading? As they are making out they are an authority when they are not.

    Report
    1. PeeBee
      August 31, 2016 at 12:13

      Good point, Keyser Söze

      I’ve Tw@tted to @ASA_UK asking them to confirm their standing as an “Authority” – let’s see what comes back.

      Would be rude not to…

      ;o)

      Report
      1. Keyser Söze
        August 31, 2016 at 12:15

        Complaint Not Upheld 🙂

        Report
      2. gk1uk2001
        September 3, 2016 at 13:56

        It’ll be ‘informally resolved’…………….

        Report
  9. Woodentop
    August 31, 2016 at 12:31

    The ASA remit has always been … “Our main aim is to bring about compliance with the Advertising Codes, rather than punish advertisers”. All they are interested in is making the advert become compliant if it falls out of guidelines, not punish. If the offender persist they have to refer it to the professional body that allows the advert to appear for that organisation to take action.

     

    So the scenario is very simple, you can say and do what you like and take the business advantage while you get away with it. When you get caught, naughty persons agrees not to do it again and off he goes smirking with his pocket full of dosh from misleading activity.

     

    It used to be controlled by OFT but another one of Blair’s ideas of deregulation. Considering we are a nation of rules and regulations today, appalling that this is allowed to continue with no meaningful punishment. Shame they are not a landlord!

    Report
    1. PeeBee
      August 31, 2016 at 12:40

      You’re spot on, Woodentop – from the ASA website:

      “On the rare occasions when an advertiser is unwilling or unable to work with us the ASA can use a range of sanctions, including publishing the business’ name on the non-compliant advertisers section of our website, and removing its sponsored search ads. In those even rarer cases when the advertiser still refuses to come into compliance, we can refer the matter to Trading Standards.”

      A good move would be to re-brand – become the ASN…

      …The Advertisers Naughty Step.

      Far more apt.

      Report
      1. PeeBee
        August 31, 2016 at 12:45

        According to their 2015 Statement, ASA spent over £330k on “ADVERTISING & PROMOTION”.

        You gotta be kidding.

        Where, for crying out loud???

        Report
        1. Woodentop
          August 31, 2016 at 19:25

          Probably in the small print. Lol

          Report
  10. Robert May
    August 31, 2016 at 13:53

    It seems that Business protection marketing regulations  2008  might be the more fruitful avenue to investigate, those are overseen by OFT, a real regulatory authority rather than a faux one

    Take for example a fees calculator that doesn’t drop below 1% and is  default set about  25% higher than the normal average for fees in the country. Rather than troubling the ASA with difficult complaints involving difficult mathematics take the complaint direct to  local trading standards.

    Report
    1. Keyser Söze
      August 31, 2016 at 14:24

      Exactly.

      Report
    2. Woodentop
      August 31, 2016 at 19:26

      But if you speak to TSI to complain, you will get …. speak to the ASA!

      Report
X

You must be logged in to report this comment!

Log In Register

Back to Homepage

Comments are closed.

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.