The Advertising Standards Authority (ASA) has upheld two of three complaints against claims made in Purplebricks' TV and website advertising.
The watchdog upheld both complaints made against claims on the Purplebricks website, but has not upheld the complaint made against the agency's TV advert.
Purplebricks' website included the claim that the average customer could save £4,158 when selling with them ahead of a high street agency.
The claim was accompanied by additional information that stated: 'Savings based on Purplebricks average sale price (day one of trading until January 2016) with the UK average commission rate of 1.5% applied. Rates vary'.
The complainant argued that the savings claims were misleading and challenged whether they could be substantiated.
In response to the complaint, which was made earlier this year, Purplebricks told the ASA that its intention was to calculate savings by comparing the average commission fee with its own fixed fee for a property of the same price.
It said it obtained the average estate agency commission fee from two sources, a Which? survey from 2011 – which stated that agent's commissions ranged from between 0.75% and 3.5% with a national average of 1.8% - and information from a large conveyancing firm which stated that the average commission fee was between 1.1% and 1.8%.
Purplebricks said that from this information it calculated an average national commission fee of 1.5%.
The agency then used data from Rightmove which suggested the average asking price in the UK was £303,190 and proceeded to claim average savings of over £4,000.
In its response to the ASA, Purplebricks also said it would update its website to include information that would allow consumers to verify the savings claim.
Despite this, the ASA has upheld the complaint and Purplebricks has been instructed that the savings claim can not appear again on its website in its current form.
A spokesperson for the ASA commented: "We did not consider that the data from a property website, particularly as it did not show the price at which the properties were sold, was adequate to confirm Purplebricks’ average sale price."
"Purplebricks had also not provided any of their sales data to demonstrate their average fee, how it was calculated, and whether the higher London rate or any optional fees, were reflected in their saving calculation."
"We concluded that the claim that consumers could save £4,158 with Purplebricks in comparison to traditional high street estate agents, had not been adequately substantiated and was likely to mislead."
The ASA condemned the web ad for not disclosing an average sale price, not providing a signpost to further information so consumers could verify the claim and not giving a source for the average estate agent fee quoted.
The other complaint, which was not upheld, centred on a Purplebricks TV ad aired earlier this year.
In a similar vein, the complaint challenged whether the claim 'You could save thousands' was misleading and questioned Purplebricks' use of a Which? survey that is over five years old.
After its investigation into the TV advert, the ASA concluded: "Given Purplebricks’ business model and the fact that they charged one of two fixed fees, an estate agent would be required to offer a very low commission for consumers to not make a saving with Purplebricks."
"We considered that given the range of estate agent commissions both in and outside of London, and the variance in property prices across the UK, Purplebricks’ fixed fees were likely, in many cases, to be lower than that of an estate agent commission."
"Therefore, given how we considered viewers were likely to interpret the claim, we concluded that the ad was unlikely to mislead."
A Purplebricks spokesperson told Estate Agent Today: “We are always listening to feedback and are happy to clarify that the average customer across the UK (excluding London and surrounding areas) saves £3,086 when selling with us and the average customer in London and surrounding areas saves £6,308.”
“We are pleased to be leading the way in driving down expensive estate agency fees.”
The advertising watchdog has today also published the details of an informally resolved complaint made against online estate agency eMoov.