Background
Summary of Council decision:
Five issues were investigated, of which three were Upheld and two were Not upheld.
Ad description
A website, www.purplebricks.com, and a TV ad for an estate agent PurpleBricks.com:
a. The first TV ad featured two men talking about the advertiser’s services, stating, “We used to be a high street estate 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 two men then stated, “And you get one of our property experts like Eve! Eve? Eve? Why is Eve ignoring us Kenny? She’s consumer driven Michael. You know, valuations, floor plans, photographs putting properties on all the major websites. Focused on our customers not on us …”. The final scene of the ad showed the advertiser’s logo, which stated “PURPLEBRICKS.COM” with text below it stating “Nothing to pay upfront” and featured a voice-over that stated, “Visit purplebricks.com and book a free valuation”.
b. The website www.purplebricks.com featured text that stated “NO UPFRONT FEES … GET THE BEST PRICE - OUR LOCAL PROPERTY EXPERTS TAKE CARE OF IT …”. Below that was a fee the advertiser charged, which stated “SELL FOR …” and in a smaller font was further text which stated “Selling fee of …”.
Issue
The ASA received complaints from two members of the public and from housesimple.com:
1. housesimple.com and one member of the public, who understood that PurpleBricks.com charged an obligatory fee, challenged whether the claim “Nothing to pay upfront” in ad (a) misleadingly suggested that consumers would only incur a cost if their property was sold;
2. housesimple.com who understood that PurpleBricks.com charged an obligatory fee, further challenged whether the claims “NO UPFRONT FEES” “SELL FOR” and “Selling fee of” in ad (b) misleadingly suggested that consumers would only incur a cost if their property was sold;
3. housesimple.com, who understood that the claim “GET THE BEST PRICE - OUR LOCAL PROPERTY EXPERTS TAKE CARE OF IT” in ad (b) related to how PurpleBricks.com valued a property and believed that it could be regarded as a claim that they could achieve a higher selling price than other agents, challenged whether this could be substantiated;
4. housesimple.com challenged whether the claim “GET THE BEST PRICE - OUR LOCAL PROPERTY EXPERTS TAKE CARE OF IT” in ad (b) misleadingly implied that PurpleBricks.com charged lower fees than its competitors; and
5. one complainant, who understood that the “Nothing to pay upfront” offer required consumers to commit to a ten-month agreement and use the solicitors that the advertiser provided, challenged whether ad (a) omitted material information.
Response
1. New Broom Ltd t/a PurpleBricks.com stated that the claim “Nothing to pay upfront” in ad (a) was 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.com stated that there was a widespread awareness of alternative services to the traditional high street estate agent and that consumers were now accustomed to paying an upfront marketing fee in addition to an agent’s commission.
PurpleBricks.com stated that ad (a) invited consumers to take advantage of a free no obligation valuation from one of their local property experts. The property expert would visit the consumer and discuss the costs in detail, including the consumer’s preference as to when they would be required to pay the mandatory fee for the service provided by PurpleBricks.com.
Purplebricks.com stated that 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 in the estate agency market, which included upfront payment, deferred payment (i.e. nothing to pay upon instruction), weekly payment until sale and part payment upfront and part payment upon completion (i.e. part payment upon instruction and part payment upon completion), as well as fixed fees and percentage fees.
Purplebricks.com stated that they did not operate in the traditional estate agency sector, as they were an online business. They stated that along with other online estate agents that used a similar business model to them, where a mandatory fee applied, they had been operating in a market where large sums of money had been invested in marketing and educating consumers on the way they operated. Furthermore, they stated that over the past ten years there had been a change in knowledge and understanding in the estate agency market amongst consumers through news, government and word of mouth. One change included consumers being charged a fee by online estate agents regardless whether their property was sold, which PurpleBricks.com believed was also enforced by most of the traditional estate agents in the UK.
Purplebricks.com believed that there were many inexperienced and/or first time sellers who were not necessarily aware that the commission fee method of payment was common in traditional estate agency and consequently, would not infer that the claim meant that a fee was only payable in the event of a sale.
Purplebricks.com therefore, believed that consumers would not interpret the claim as meaning that sellers would only be required to pay a fee in the event of a sale, but rather that they did not have to pay the mandatory fee at the point of instruction, but at a later date.
Clearcast stated that they had worked closely with the agency and advertiser to ensure that the ads did not mislead and any claims made were supported. They referred to the response they received from PurpleBricks.com and stated that consumers did not have to pay anything at the point of instruction, which was generally the way that estate agents operated. Furthermore, PurpleBricks.com did not enter into a credit agreement with consumers and were not regulated in the provision of their nothing to pay upon instruction service.
Clearcast also referred to the agency’s response, stating that consumers did not have to pay upfront. They either paid the fee on the sale of the house or after ten months if they had not sold the property.
Clearcast believed that the claims were accurate and that there was no upfront fee. They understood upfront fee to mean that consumers did not have to pay immediately upon a signed agreement with a company, rather than that there would be no fee whatsoever.
Clearcast also stated that ad (a) invited consumers to book a free valuation where the terms and conditions to the no upfront fee would be explained by the property expert.
2. Regarding the claims “NO UPFRONT FEES”, “SELL FOR” and “Selling fee of” in ad (b), PurpleBricks.com said that they did not believe they were misleading. They stated that the term upfront had a clear definition, meaning that a consumer did not have to pay anything at the point of instruction. They stated that consumers were fully aware that they were agreeing to pay for the service provided by PurpleBricks.com and that they could either pay immediately or at a later date, as stated in their terms and conditions. Furthermore, consumers could not instruct PurpleBricks.com without seeing the online terms that they could either choose to: (a) instruct them and pay upfront or; (b) instruct them and pay later.
3. & 4. PurpleBricks.com believed that the claim “GET THE BEST PRICE - OUR LOCAL PROPERTY EXPERTS TAKE CARE OF IT” in ad (b) did not make any comparison regarding their service and price with their competitors. They stated that there was no reference to any comparison regarding Purplebricks.com achieving a better price than either traditional or online estate agents.
PurpleBricks.com stated that they achieved the best price for their consumers by providing them with an experienced local property expert who had extensive knowledge about the local area, including property prices and would visit the property and carry out an inspection and gather further information from the seller. The expert would also help the seller obtain the maximum purchase price for their property. PurpleBricks.com believed that without the expert, it would result in unrealistic pricing, properties not selling or being sold for less than they were actually worth.
PurpleBricks.com stated that the claim “GET THE BEST PRICE - OUR LOCAL PROPERTY EXPERTS TAKE CARE OF IT” was based on their customers’ satisfaction with the service they received, specifically referring to how PurpleBricks.com’s experts achieved the best price that they could for a property. PurpleBricks.com stated that this was demonstrated in their customer review ratings that they had obtained, including from a third-party review platform.
PurpleBricks.com further stated that the claim did not suggest that they offered the best rates. They believed that it made clear that their local property expert would help a consumer get the best possible price for their home and would be interpreted as such by viewers.
5. PurpleBricks.com stated that they did not contractually require customers to remain engaged with their services for ten months. A consumer was free at any time to withdraw, appoint another agent solely or in addition to Purplebricks.com and could have a marketing break and return without obligation or further charge. Furthermore, their fee did not include conveyancing costs as consumers could either choose their own solicitor or PurpleBricks.com’s recommended choice.
Clearcast stated that consumers were charged a fee if their property was not sold within ten months after instructing PurpleBricks.com. However, they considered that this was not a significant condition that needed to be addressed in the ad. They believed viewers would not purchase PurpleBricks.com’s service solely based on the content of the ad, as it was a type of service that needed to be researched. They stated that because it was not a quick purchase item or a service that consumers would buy directly via the advert, a qualification was unnecessary.
Assessment
1. Upheld
The ASA understood that PurpleBricks.com was an online estate agent and whether or not consumers sold their property, they would be charged a mandatory fee. While we acknowledged that consumers did not have to pay this fee immediately upon instructing PurpleBricks.com, it had to be paid within ten months of their agreement.
We understood that, estate agents income generally came from charging the seller of a property a percentage of the purchase price as a commission. We considered that the average consumer would be familiar with this model. We therefore considered that consumers would regard the claim “nothing to pay upfront” to mean that they would only pay this commission in the event of a sale and wouldn’t have to pay anything before their homes went on the market. However, that was not the case with PurpleBricks.com, who had intended it to be a reference to when the compulsory fee could be paid. We considered that this was not made sufficiently clear in the ad and therefore concluded that the claim “Nothing to pay upfront” in ad (a) was misleading.
On this point ad (a) breached BCAP Code rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading Advertising) and 3.10 3.10 Advertisements must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify. (Qualification)
2. Upheld
We noted that ad (b) was marketing PurpleBricks.com’s sales and letting service and featured the claim “NO UPFRONT FEES”. Further down the page it quoted price statements for how much PurpleBricks.com charged for selling a property, which stated “SELL FOR …” and “Selling fee of …”. The ad then stated that consumers could “INSTRUCT PURPLEBRICKS FOR A FIXED FEE” and was followed by text that stated “You don’t have to pay anything upfront”. We considered that since consumers were likely to be more familiar with estate agents making their commission in the event of a sale, the claims would be interpreted to mean that they would not have to pay anything unless they sold their property, which we understood was not the case with PurpleBricks.com.
Therefore, we considered that ad (b) did not make sufficiently clear that PurpleBricks.com charged a mandatory fixed fee that could be paid at a later date and concluded that the claims “NO UPFRONT FEES”, “SELL FOR”, “Selling fee of” and “there’s nothing to pay upfront” were misleading.
On this point ad (b) breached CAP Code (Edition 12) rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading Advertising) and 3.9 3.9 Marketing communications must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify. (Qualification)
3. Upheld
We noted that PurpleBricks.com did not believe that they were making a comparison regarding their service and prices with their competitors.
In their response, PurpleBricks.com clarified that the claim “GET THE BEST PRICE - OUR LOCAL PROPERTY EXPERTS TAKE CARE OF IT” in ad (b) referred to their local property experts helping consumers to sell their homes at the highest possible price that they could achieve, and was based on customer reviews that they had obtained. We considered, however, that it would be regarded by consumers as being a comparative claim that selling with PurpleBricks.com would lead to consumers getting a better price than would have been the case had they used another agent. However, we had not seen comparative data showing that this was the case.
Therefore, because PurpleBricks.com had not provided comparative data to substantiate the claim “GET THE BEST PRICE - OUR LOCAL PROPERTY EXPERTS TAKE CARE OF IT”, we concluded that it was misleading.
On this point ad (b) breached CAP Code (Edition 12) rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading Advertising), 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation) and 3.33 3.33 Marketing communications that include a comparison with an identifiable competitor must not mislead, or be likely to mislead, the consumer about either the advertised product or the competing product. (Comparisons with Identifiable Competitors).
4. Not upheld
We noted that ad (b) prominently stated PurpleBricks.com’s fee at the top of the page and that there was no reference to their competitors' prices. Furthermore, we noted that the claim “GET THE BEST PRICE” was immediately followed by “OUR LOCAL PROPERTY EXPERTS TAKE CARE OF IT" and that the customer testimonials further down the page referred to the help that they had received from their property expert. This we considered made clear that the claim “GET THE BEST PRICE - OUR LOCAL PROPERTY EXPERTS TAKE CARE OF IT” referred to the selling price PurpleBricks.com would achieve for their consumers, as referred to in point 3, rather than suggesting that they charged lower fees than their competitors. We, therefore, concluded that the claim was not misleading in that respect.
On this point we investigated ad (b) under CAP Code (Edition 12) rules 3.1 3.1 Advertisements must not materially mislead or be likely to do so. (Misleading Advertising), 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation) and 3.33 3.33 Marketing communications that include a comparison with an identifiable competitor must not mislead, or be likely to mislead, the consumer about either the advertised product or the competing product. (Comparisons with Identifiable Competitors), but did not find it in breach.
5. Not upheld
We understood that one of the complainants was informed by PurpleBricks.com that to take advantage of the “Nothing to pay upfront” offer, they had to commit to a ten-month agreement and use the solicitors that the advertiser provided.
However, we understood from PurpleBricks.com’s response that consumers could either choose their own solicitor or the one they recommended. Furthermore, we noted that consumers were not contractually obliged to remain with PurpleBricks.com for a period of ten months and that they could terminate their agreement at any point or use an additional agent without being disadvantaged. Therefore, for those reasons, we considered that ad (a) did not omit material information and concluded that it was not misleading.
On this point we investigated ad (a) under BCAP Code rules
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
and
3.2
3.2
Advertisements must not mislead consumers by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that consumers need in context to make informed decisions about whether or how to buy a product or service. Whether the omission or presentation of material information is likely to mislead consumers depends on the context, the medium and, if the medium of the advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means.
(Misleading Advertising) and
3.10
3.10
Advertisements must state significant limitations and qualifications. Qualifications may clarify but must not contradict the claims that they qualify.
(Qualification) but did not find it in breach.
Action
The ads must not appear again in their current form. We told New Broom Ltd t/a PurpleBricks.com to ensure they held sufficient evidence to substantiate their marketing claims and qualified them appropriately in future.
