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TODAY'S OTHER NEWS

Advertising watchdog intervenes over Purplebricks' VAT claim

The Advertising Standards Authority has intervened following a complaint about VAT savings on Purplebricks‘ website.

A member of the public contacted the ASA to challenge whether a savings calculator on the agency’s website - which showed a sliding percentage value, excluding VAT - was in fact misleading, because elsewhere on the site it was stated that savings and prices included VAT.

“We contacted the advertiser who agreed to amend the ad to make clear that VAT was in addition to the percentage value stated” says a spokesperson for the ASA.

The authority was satisfied at the response and closed the case informally.

The ASA was also in action following a complaint about Scottish online agency Mov8 Real Estate.

The authority received a complaint about a claim on the agency’s website that “On a £200,000 property You Save £1446 Versus 1% plus VAT Estate Agency Fee”.

The complainant - McEwan Fraser Legal - understood that the savings claim did not reflect the cost of services that were included in traditional estate agent fees, and challenged whether the claim was misleading and could be substantiated.

Mov8 Real Estate Ltd told the ASA that the claim was a simple comparison between its estate agency fee and that of a traditional estate agent charging a one per cent commission fee plus VAT, for a property worth £200,000. 

Mov8 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 online firm explained that none of their additional fees were compulsory because each customer had different requirements. 

“We contacted the advertiser who provided their assurance that future ads will make it clear that additional costs may be applicable to their estate agency fee. On this basis, we considered the case closed informally” says the ASA.

  • Ian Smith

    For an agency in Scotland that charges 1.75% as standard + vat I thought the advert would have been better left alone as the savings against their fees would be nearer £2,5000

    Must be feeling the pressure !!!

  • Robert Carroll

    Thank you for your article Graham. I follow your articles via Twitter and always find them interesting and informative. There are a couple of things that require clarification here though.

    First, MOV8 isn't actually an 'online agent' (as the company's MD, I hopefully speak from a position of authority on this)! It's of course flattering to be put in the same category as a high-growth, listed company like PurpleBricks. However, although we have been offering an innovative Fixed Estate Agency Fee fee structure since 2009, are heavily focused on technology and have been growing at about 40% per annum for several years, we do actually have a Head Office and three, local branches throughout Edinburgh and the Lothians, so anyone is welcome to pop in and see us any time!

    Second, the ASA's comments as reported here may be prone to misleading as to the true position. We absolutely did not 'provide assurance that our future adverts will make it clear that additional costs may be applicable to our estate agency fee'. Our Estate Agency Fee (aka 'Commission' for many estate agents), is fixed and does not increase depending on circumstances. What we did say is that there may of course be other costs of selling a home (e.g. Home Report, glossy brochures etc) and we proactively offered to clarify this on the webpage in question (though we did strongly feel that we were comparing apples with apples here and didn't believe that this clarification was necessary).

    Thank you for keeping us all informed about what is happening in our industry and keep up the great work.

  • Colin Bain

    Glad you have someone worried Robert, they don't like me either !!!

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