The Advertising Standards Authority has banned an ad by online agency emoov after a complaint disputing the duration of a fee offer, a claim that the agency covered 98 per cent of UK postcodes, and a claim about how much it saved sellers.
“The ad must not appear again in its current form” the ASA has told emoov.
The dispute came after the complainant spotted an entry on emoov’s website on February 2 this year stating: “Looking to sell your home? Half Term: Sign up now & receive £220 off”.
The website also stated: “We’re local everywhere. We’ve sold in 98% of UK postcodes”.
The ad included a comparison table, with the Brixton branch of Foxtons estate agents, which included various features such as number of listings, asking price and selling fee. The table stated: “Compare us to traditional estate agents. Foxtons customers would have saved £13,449 … emoov National … Selling Fee … £595 … Foxtons Brixton … Selling Fee £14,044”.
The complainant understood that the same money off promotion had been offered prior to the current promotion, and so challenged whether the claim “Half Term: Sign up now & receive £220 off”, was misleading.
The complainant also challenged whether the following claims were misleading and could be substantiated: “We’ve sold in 98% of UK postcodes” and “Foxtons customers would have saved £13,449”.
The ASA was told by emoov that it had run two other promotions, one for Valentine’s Day and another for Mothers’ Day, and both had the same money off offer and terms and conditions.
On the second point, emoov provided a data sheet which it said supported the claim that it had “sold in 98% of UK postcodes” and claimed that “the majority of their customers would understand the word ‘postcodes’ to mean ‘postcode areas’” according to an ASA statement this morning.
On the third point, emoov said that the claim “Foxtons customers would have saved £13,449” was in fact lower than the sum Foxtons’ customers would have saved as they erred on the side of caution.
The ASA statement says: “They said the calculation was based on figures taken in late 2015, at which point the average asking price for Foxtons Brixton, London, on a particular online property listing site was £585,167. emoov said the calculation was based on a 2.0 per cent commission rate which was a typical fee for London estate agents and that this rate was far lower than Foxtons’ standard fee. Therefore, they said the savings calculation was a conservative estimate, with the actual savings being far greater.
“They said Foxtons’ terms and conditions showed that their lowest rate of commission was 2.7 per cent. They said although it was possible for Foxtons to offer services at a discounted rate on occasions, that was likely to occur infrequently. Furthermore, they said that by using the lowest commission fee offered by Foxtons, savings would be £14,717.19; a higher commission fee would mean savings of £19,821.25.”
The ASA was unconvinced on the three points, however.
It says consumers were likely to understand that the “Half Term” offer related to defined dates around school holidays, when in fact a similar offer had existed earlier in the year.
“We considered that, because each offer was subsequently replaced with a similar promotion albeit with a different closing date, emoov had in effect extended the time to respond to the offer, changing closing dates on consecutive occasions. Therefore, consumers who had taken up the initial offer may have hurried into participating in the promotion believing it was about to end, when they could have delayed taking part until a more convenient time” the ASA states.
“Because of that, we concluded that the promotion was misleading and in breach of the CAP [advertising] Code” says the authority.
On the second point, the ASA says it considered that consumers were likely to understand that the claim implied emoov had sold properties in a general postcode district within the UK which related to an area covered by the first part of a postcode, such as ‘SE5’ - rather than in each specific full postcode, that is, a specific street or streets.
“We reviewed the data provided but noted that it related to broader postcode areas (for example, ‘SE’) and did not show that emoov had sold at least one property in each postcode district. In light of that, we considered that the claim had not been substantiated and concluded that it was misleading” the authority goes on.
And on the final point, the ASA says that although the ad included wording referencing one particular Foxtons branch. “the overall impression of the ad, particularly the references to ‘Foxtons customers …’, was that, on average, customers who chose to sell their property with emoov as opposed to Foxtons, would save around £13,449.”
The authority also said that in the context of the claim “Compare us to traditional estate agents”, it felt consumers would believe the savings claim was indicative of what they could achieve more generally if using emoov as opposed to a traditional high street agent.
In a lengthy explanation of its decision on this point, the authority says: “We understood that the savings claim was based on a comparison between the selling fee that applied to emoov’s average national asking price against the fee that applied to Foxtons Brixton’s average selling price, as opposed to a comparison between the fees levied for the same value property.
“We noted that while emoov was a national company, Foxtons was based in Greater London and that there was a difference of £270,487 between the ‘asking prices’ quoted in the ad. Given the quoted average asking price for Foxtons was significantly higher, and would impact upon the corresponding commission fee, we considered that this disparity exaggerated the likely savings that could be achieved by using emoov.
“In addition, the fee quoted in emoov’s figures represented their lowest fee option and excluded optional add-ons that could increase the overall costs. Therefore, we considered in the absence of any qualification, the quoted fee was not necessarily representative of the costs that all emoov customers paid.
“For those reasons, we considered that emoov had not demonstrated that the savings claim was representative of the amount that consumers could save by opting for emoov’s services instead of a traditional high street agent and concluded the claim was misleading and had not been substantiated” the authority says.
The ASA statement concludes: “The ad must not appear again in its current form. We told emoov Ltd to ensure closing dates of promotions were not extended unless circumstances outside their reasonable control made it unavoidable, not to claim that they had sold properties in 98 per cent of UK postcodes or that their customers could save specific amounts of money compared to traditional high street agents in the absence of adequate substantiation.”