EYE NEWSFLASH: Four top agents named in latest ‘cartel’ case

The Competition and Markets Authority has today announced that four top agents have provisionally been found guilty of breaking competition law.

They are Michael Hardy, Prospect, Richard Worth and Romans, all Berkshire based.

It has emerged that it was Romans itself that told the CMA.

This morning Romans CEO Peter Kavanagh said: “In June 2017, senior directors of Romans became aware that, some years ago, a small number of Romans residential sales executives across a few branches had acted in a manner totally contrary to the standards and values of the company.

“We immediately alerted the Competition and Markets Authority about this matter and have assisted with the CMA’s subsequent investigation under its leniency programme.

“We also undertook our own investigation and, based on our findings, have taken the appropriate disciplinary action against those individuals involved.  We also reviewed and strengthened our training, management and compliance procedures to ensure that all our staff act with integrity at all times and adhere to the company’s high ethical standards.

“We are truly sorry that the judgement and behaviour of these individuals did not meet the standards of behaviour expected by our people, our customers and our colleagues in the industry.

“As the investigation by the CMA is ongoing, we are unable to comment further at this time.”

Prospect also released a statement, saying that the investigation was into agents allegedly agreeing not to “aggressively under-cut each other during the 2008 recession” and that “it appears Prospect inadvertently broke anti-competition law in an effort to survive [the] economic turndown”.

Founder Colin Wells said this morning: “As a business that holds the customer very dear, we are very disappointed by the CMA’s initial findings.

“This was never a situation of us wanting to decrease competition or market choice for consumers. In fact we wanted the exact opposite: 2008 was a difficult year for everyone and we were worried the larger agents could remove local agencies from UK high streets altogether by using their financial strength to undercut the market.”

Wells continued: “I am truly sorry my actions have been viewed in this way. At Prospect, we always try to do what is right for the customer, employees and wider community.

“This matter was over ten years ago and we now have incredibly stringent processes and procedures in place to ensure we operate with the highest levels of transparency and compliance.

“In accordance with CMA guidance back in 2015, we immediately introduced an [appropriate] policy, and have continued to build on this ever since. Furthermore, to ensure others do not make the same error, I have also been working closely with the CMA, and will continue to do so.”

The full CMA statement says:

“[They] broke competition law by taking part in a price-fixing cartel where members set minimum levels of commission fees for the sale of residential properties. The alleged cartel took place in the Berkshire area from at least September 2008 and lasted for almost seven years.

The result of such price-fixing is that homeowners may be denied the chance of securing the best possible deal when selling their properties, as they are unable to shop around all of their local agents for better rates.

In a Statement of Objections issued today, the CMA has provisionally found that the four estate agents:

  • agreed that they would all apply minimum commission rates for residential property sales
  • exchanged confidential pricing information
  • held meetings and colluded to make sure that they were all enforcing and maintaining the agreed minimum commission rates.

Howard Cartlidge, Senior Director, Cartels, said:

Everyone knows selling your home is expensive. So it’s important that people should be able to shop around all of their local estate agents to make sure they are getting the best possible deal.

Estate agents who conspire to set minimum commission rates are cheating homeowners and breaking the law. Where we find evidence that this is happening, we will not hesitate to take action to protect people selling their home.

Today’s findings in the Statement of Objections are provisional and will not necessarily lead to a decision that the companies have breached competition law. The companies now have the opportunity to consider the detail of the CMA’s provisional findings and respond to it. The CMA will carefully consider any responses before any final decision is made.

Tackling cartels is a fundamental part of the CMA’s work, and this is the third case brought against estate agents in recent years. Previous actions include fining 4 estate agents in Somerset over £370,000 for colluding to set minimum commission rates, and charging 3 members of the Three Counties Estate Agent Association £735,000 for breaking competition law in relation to estate agent and letting fees.

The CMA also has an ongoing Stop Cartels campaign, which aims to educate business about which practices break the law and urges people to come forward if they suspect a company has taken part in cartel behaviour, such as fixing prices or rigging contracts. The campaign explains what anti-competitive behaviours are, why they are illegal, the impact they have on customers and the economy, and why they should be reported.”

More top news stories

Former UK Purplebricks boss Lee Wainwright takes new role at agency marketing business

Continue Reading ...

Book early for next ARLA conference, agents are urged after sell-out this year

Continue Reading ...
x

Email the story to a friend

32 Comments

  1. Eyereaderturnedposter12

    I’ve no doubt that not a tear shall be shed for the Agencies named above (other than their own!)…
     
    Naughty, Naughty…

    Report
    1. Bless You

      Wow. You do know this is 2019. It is a sin to make money and survive . Romans u are rats looking to spin old news.

       

      Report
  2. GPL

     

    So, Donald Trump said “There was Noooooo Collusion”

     

    A the CMA proved there WAS Collusion.

     

    Just goes to prove some Estate Agents do actually get on.

     

    Amazing!

     

     

    Report
  3. simonwilkinson73

    Ouch, do we see some massive fines coming?

    Report
  4. surrey1

    Pretty sure the Countrywide offices are in collusion. They all seem to be quoting “we charge 1%, but I don’t want to lose it on fee” 🙂

    Report
  5. vype200871

    This will be in Sandhurst i am sure.  All 4 operate in this small village/town and it is no surprise they have done this being such a small town to have 4 agents locally operating in. It could also be in surrounding Crowthorne. Not sure being an agent for over 20 years i see this as a major issue, unless caught of course.  Protecting their fee’s and then knowing the ‘win’ of the instruction was based on the skill of the agent and who the vendor preferred rather than who did it for the cheapest. I know a few agents got caught doing the same in Farnham a few years back.

    Report
    1. Eyereaderturnedposter12

      IMO, more likely Reading/Twyford/Wokingham?

      Report
      1. vype200871

        possibly all of the above areas.

        Report
        1. Poster121

          Wokingham offices of all these agencies where investigated 12 months ago. Definitely Wokingham.

          Report
  6. vype200871

    To be fair when i worked in North London in the early 1990’s i worked in Finchley and there were 30 agents on the high st and we did the same with sole agency and multi agency fee’s fixing them and then every friday a lot of us would meet up in a local bar after work and it was a healthy and good night as we would be able to rib each other on the instructions won and lost knowing it was the better person that won and no fights over fee wars.   The agent who did break rank had his office entrance stuffed full of his for sale boards after a Friday night and had his locks glued.  Was not my company but lets say he never did it again.  lol.

    Report
    1. Bless You

      Love it. A kind of quality control. 
      If people aren’t happy with a genuine fee that pays local people and supports the local economy they can go to purpleshits . Can’t see the problem. Of course I can how it’s not a great thing p.r. wise but in the real world no-one cares about agents so ave it! 

      Report
      1. Poster121

        People aren’t interested in paying ‘local’ people who are collaborating illegally behind their back. There is no defence for these horrid organisations. One of which i will point out recently went into administration and got rid of half its staff without pay! The world is shrinking around these old oligarchs who are only interested in their own greed.

        Report
        1. Bless You

          yes but in your perfect world where earning money is a sin… they go bust and cant employ ‘local’ people… as this company has…  #realworld

          Report
  7. Country Boy

    What a pity Estate Agents cannot shop around for Council and Government over priced, slow and tedious services, more so as they often refer to us as ‘customers’!

     

    If we could we could reduce our commission even more!

    Report
  8. The Hero

    Fair play to Romans though, it appears from the story they did the right thing and called out the behaviour as unacceptable.

    Report
    1. HD23

      Yes Good on Romans, the most fair and respectable agent out there!

      Report
      1. Eyereaderturnedposter12

        ”Fair play”?…Ultimately, they (along with other Agents) allegedly engaged in cartel-like activity and then (presumably realising that there was a risk that the scheme would be ‘outed’) decided to cut their potential losses, and ‘spill the beans’…
         
        Not a terrible attempt at ‘spin’, but for heaven’s sake, they were complicit (and possibly a driving force behind the arrangement?)!!!

        Report
        1. Bless You

          Can romans post a picture If they get a horses head left in their office. Rats

          Report
      2. HoneyBadger87

        ‘fair and respectable’…I assume that’s meant to be sarcastic, if not…I wonder who you work for?

        Report
    2. Whaley

      Couldn’t agree more. Looks like Roman’s did everything they could in their own power once they knew something was up.

      I’m sure that wouldn’t be the case everywhere

      Report
      1. Poster121

        Absolutely not, they realised it would come out so arranged this situation to prevent a PR disaster. 

        Report
    3. thepropertyexpert

      Fair play to Romans? Done the right thing? They’ve simply thrown everyone else under the bus as they knew the story was going to break…same old…same old…

       

      After all, isn’t this the same firm we saw walking out of court on television for falsely erecting sold boards outside their own directors homes??…didn’t get away with that one either.

      Report
    4. The Hero

      I suppose my point though is that the organisation has, quite rightly, ‘gone public’ as soon as it has discovered that branch managers were acting illegally.

      It’s not beyond the realms of possibility that the higher echelons had no idea that the culprits were doing this, so to my mind they have done exactly what they should have done once they discovered this was taking place.

      Report
  9. whatdoiknow58

    Cannot believe anyone is defending these crooks or making light of it. Donald Trump?? This was fraud based upon greed pure and simple greed. ‘ We did it to survive ‘ for 7 years? If that’s part of your defence I would get a better lawyer as you are going to need one.

    Report
  10. iamarealistEA

    Amazed that they did not include the other three agents in Reading that were involved in this cartel…

    Report
    1. Eyereaderturnedposter12

      Are you alleging that there are 7 agents involved, in total?
      Do tell…
       

      Report
      1. iamarealistEA

        No, only 5 agents. Meetings between 5 agents in Reading happened in 2008 and 2009 and were held in Romans offices, two of which have been named in the report the other 3 are agents with offices in RG1.

        Report
    2. RealAgent

      What apart from the fact that when you google the agents, all of them are in Wokingham and only two have offices in Reading?

      Report
      1. Poster121

        Not only that, all of their offices where spot checked 12 months ago and had investigators on the premisis for 3 days all in Wokingham branches. 

        Report
  11. PeeBee

    One Agent in a town sets a minimum Fee = fine and dandy.
     
    Two or more Agents in the same town set minimum Fees individually = fine and dandy
     
    Two or more Agents, in the very same conurbation, agree to set one minimum Fee = illegal act.  They are a “cartel”.
     
    They are in fact, in the words of a Senior Director of CMA, “…cheating homeowners and breaking the law.”
     
    They are, not, apparently, protecting their livelihoods and those of their staff – which surely is first rule of business.
     
    They are not, apparently, ensuring that a Fee be charged that enables them to provide a service commensurate to the customers’ expectations.
     
    They are not, apparently, ensuring that by trading profitably they remain in business thereby providing present and future homeowners (aka “the consumer” that these organisations purport to represent and champion) with the best possible range of Agents available to represent their interests.
     
    They are not, apparently, creating the opportunity for other Agents to deliberately undercut their Fee – thereby actually giving those Agents who cannot negotiate their own next meal a chance of securing business by dropping their pants and working for buttons.
     
    It’s a funny old world, innit…

    Report
    1. htsnom79

      “Assisted with the CMA’s subsequent investigation under its leniency programme” ie throw everybody else off a cliff to mitigate our own consequences.

      This doesn’t sit well with me either, everybody sets a minimum fee for individual p&l reasons, perfectly legal, UNLESS YOU TALK, and this in a business of no sale no fee…..

      Report
  12. DarrelKwong43

    cannot believe it was Romans, next you will be telling me they sell some over priced  service called a residency membership at 5% of the rent each month………….

    Oh hang on

    Report
X

You must be logged in to report this comment!

Leave a reply

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.