The Advertising Standards Authority’s Pricey Home Truths for Property Agents
Following recent ASA rulings and upheld complaints against PurpleBricks, new guidance has been issued for estate and lettings agents about how they market their services in that their “Marketing communications must not materially mislead or be likely to do so” and omit “material information”.
The ASA’s topline guidance to the property sector, whether on-line or on the high street, is “Don’t stretch the facts” and “Don’t exaggerate” especially around pricing.
The Advertising Standards Authority (ASA) is the UK’s independent advertising regulator and ensures that all advertising issued by any company, agency and media owner, regardless of industry or sector, adheres to the Advertising Codes. The body upholds complaints about misleading, unsubstantiated or un-true claims, as well as offensive advertising.
The ASA’s most prominent recent ruling in the property sector has been against PurpleBricks Group plc after Hunters Property Group challenged claims made on the PurpleBricks website about their fee structure.
In October 2017, text on the company’s website stated “Instruct us to sell for £849” with smaller text stating “£1,199 in London and surrounding areas”. By hovering over an accompanying icon, text was revealed stating “This is our standard fee for everywhere outside of London and surrounding areas, where we charge £1,199 inc VAT. Around 40% of our customers pay us a fixed fee of £300 to cover ALL viewings”.
The ASA considered consumers would understand the claim “Instruct us to sell for £849” and the additional text “£1,199 in London and surrounding areas” to mean that those were the total prices they would pay for the provision of Purplebricks’ services, including viewings.
Because the ad did not make clear that the viewings service had a separate fee, payable in addition to the £849 and £1,119 prices, the ASA upheld that the ad was likely to mislead, and breached the Committees of Advertising Practice (CAP) Code rule 3.1: Misleading Advertising. Additional claims on the site were upheld as breaching CAP Code rule 3.33: Comparisons with Identifiable Competitors, and 3.39: Price Comparisons.
Similarly, the website for Pink and Cow estate agents included the claim “Sell your home for 0.5%”.
The ASA considered that a number of other statements on the company’s website implied that Pink and Cow were offering a service that was similar to the service given by a high street estate agent. It stated “We’re in the perfect position to show the right buyers around your property” and, taken with the claim “Sell your home for 0.5%”, this would suggest to consumers that an accompanied viewing service was included.
The company also stated that it was a “Local Online Estate Agent” that provided “the full, local customer facing service of a local estate agent” and that it provided “The Full Service” and below, that “The High Street Estate Agents and Online Estate Agents just can’t keep up”. It was deemed that the statements contributed to an overall impression that the service offered by Pink and Cow was a combination of both an online estate agent and a high street estate agent. In that context, and the fact that the 0.5% fee did not include accompanied viewings was material information which should have been included in the ad. Because that information was not included the ASA concluded that the ad was misleading and ordered to be removed.
The ASA deems that in general, clarity should also apply to how VAT is presented in any advert. The ASA found another company’s advert offering a VAT-exclusive selling fee of “0.9% + VAT” was misleading because the percentage fee should have included VAT.
In an additional case, four complainants, including Plymouth Trading Standards, Alexander Dawson (an Independent property consultant) and PQD Estates Ltd, challenged whether PurpleBricks’ references to “Local Property Experts” were misleading and could be substantiated. Although this particular ruling was not upheld, the ASA advises that it is “acceptable to refer to ‘local’ property experts if you can prove that they have relevant knowledge and experience within a defined geographical area”, although you must not imply that you have bricks and mortar branches if not true.
When devising advertising campaigns, all companies and marketers must adhere to the CAP Codes, which cover Broadcast advertising (TV and radio), and Non-Broadcast advertising, which covers every other medium including sales promotions, online advertising, all printed and direct marketing communications.
Section 3 of the Code sets out key guidelines to ensure your marketing activity is compliant:
- Don’t mislead consumers materially
- Don’t omit material information
- Ensure you can substantiate objective claims
- Distinguish between objective claims, subjective claims and puffery
- Don’t exaggerate
- Ensure objective comparative claims are fair and verifiable
Although you could escape ‘under the radar’, especially if you are a small independent company, making misleading, exaggerated or false claims is not a risk worth taking as it may damage your brand reputation. And fundamentally, it’s simply dishonest and unethical marketing practice.
The ASA website provides specific guidance for property sales and lettings advertising: https://www.asa.org.uk/topic/Property_sales_and_lettings.html
The CAP Code and BCAP Code can be found on the ASA website: https://www.asa.org.uk/codes-and-rulings/advertising-codes.html
The majority of the text relating to the cases highlighted is taken unedited directly from the Advertising Standards Authority’s website: https://www.asa.org.uk