Three complaints have been upheld against Purplebricks by the advertising watchdog.
As a result Purplebricks must not repeat some claims that were in a TV advert.
A further two complaints were not upheld.
The complainants who approached the Advertising Standards Authority with concerns included a Purplebricks competitor, House Simple. The other two were members of the public.
The complaints revolved around claims made in the TV advert and also online.
The TV advert featured two men supposedly Kenny and Michael, who said: “We used to be a high street agents. But now we’re purplebricks.com. A revolutionary new way to sell your house that could save you thousands of pounds.”
At this point in the ad, small print appeared at the bottom of the screen stating ‘Based on average estate agent’s commission – Source: Which? survey 2011’
The TV advert ended with a text message saying: “Nothing to pay upfront” and featured a voice-over that stated, “Visit purplebricks.com and book a free valuation”.
The Purplebricks text on their website said: “No upfront fees . . . get the best price – our local property experts take care of it.” Below that was a fee.
- The claim “Nothing to pay upfront” in the TV advert was challenged on the grounds that it misleadingly suggested that consumers would only pay if their property was sold.
- House Simple challenged the same claim on the Purplebricks website for the same reason.
- HouseSimple went on to challenge the claim on the website: “No upfront fees . . . get the best price – our local property experts take care of it.” This was on the grounds that it misleadingly implied that Purplebricks achieved a higher selling price than other agents, and whether this could be substantiated.
- HouseSimple challenged whether it also misleadingly implied that Purplebricks charged lower fees than its competitors.
- The final challenge was from a complainant who understood that the “Nothing to pay upfront” offer required consumers to commit to a ten-month agreement and also use the solicitors the advertiser provided. The complainant challenged whether the TV advert omitted material information.
Purplebricks defended its “Nothing to pay upfront” claim based on the fact that consumers were not required to make an upfront payment once they had agreed to use their service. Furthermore, they believed that the ad did not suggest that consumers would only incur a cost if they sold their property.
Purplebricks said the market had moved beyond traditional estate agency and the “no sale no fee” payment model.
They believed that consumers were now aware of other payment structures, including being charged a fee by online agents whether their property was sold or not.
“Purplebricks believed [this] was also enforced by most of the traditional estate agents in the UK,” says today’s ASA ruling.
Purplebricks also defended the claims on its own website of “no upfront fees”, “sell for”, and “Selling fee of”, saying that consumers were fully aware they were agreeing to pay for the service, either immediately or later.
On the challenges to its claim about getting “the best price – our local property expects take care of it”, Purplebricks said they achieved the best price for sellers by providing them with an experienced local property expert.
Its customers were happy that Purplebricks did achieve the best price, and this was shown in customer reviews on a third party platform.
On the final complaint, Purplebricks said that they did not contractually require customers to stay with them for ten months and customers could either choose their own solicitor or Purplebricks’ recommended choice.
Consumers could withdraw at any time, appoint another agent solely or in addition, and have a marketing break and return without obligation or further charge.
The ASA was told that consumers were charged a fee if their property was not sold within ten months.
Complaints 1, 2 and 3 were upheld. Complaints 4 and 5 were not.
- The ASA said that Purplebricks charged a fee whether the property was sold or not. While consumers did not have to pay immediately, the fee had to be paid within ten months. The ASA also said that consumers would be familiar with the normal estate agency charge as a percentage of the selling price. As a result, they would consider the claim “Nothing to pay upfront” meant they would only pay in the event of a sale, and would not have to pay anything before their home went on the market. The ASA ruled this was misleading.
- Complaint upheld for same reason as (1).
- The ASA said that customers would regard the claim “Get the best price – our local property experts take care of it” as meaning that Purplebricks would get them a better price than other agents. There had been no comparative data to show this was the case.
- The ASA did not believe the same claim meant people would believe Purplebricks charged less than its competitors.
- The ASA agreed with Purplebricks that customers were not held to contract for ten months, and that they could choose their own solicitor.
* Could ‘Kenny’ and ‘Michael’ be about to depart from our TV screens? The characters are actors apparently playing real-life Purplebricks founders Michael and Kenny Bruce. According to trade publication Campaign, Purplebricks has parted from its previous advertising agency BMB. The official reason cited was ‘creative differences’. Purplebricks has told Campaign it now has a new brief, and is looking for a new agency.
Yesterday shares in Purplebricks rose 5p to 134p.