Online estate agent Purplebricks has been warned to clarify its advertising around its fees after a watchdog found it was likely to mislead consumers.
The Purplebricks website stated that consumers could “instruct us to sell for £849”, with small text adding that the fee rose to £1,199 in London and surrounding areas.
Next to this was an icon which, when hovered over, revealed that customers could pay an extra one-off fee of £300 for the agency to conduct viewings of the property.
Hunters Property Group, which understood that the average fee paid to Purplebricks was higher than £849, complained that the information was misleading.
It also complained that the website was misleading because it did not make clear that the £849 fee, unlike estate agent commission, had to be paid irrespective of whether or not the property was sold and before the sale was completed.
Purplebricks said £849 was the figure that most people paid to sell their property and around 40% of people paid an optional £300 for their viewing service.
They said they made it clear in the section entitled “What’s included in our fee” when the fee was payable, and also included this information in their FAQs.
The Advertising Standards Authority (ASA) said consumers would understand the figures to mean the total prices they would pay for Purplebricks’ services and would assume that the agency conducted viewings on behalf of sellers as part of their fee.
The ASA said: “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, we considered the ad was likely to mislead.”
It said it was standard practice for traditional estate agencies to only levy their fee in the event of a successful sale, and after that sale was complete, and said consumers were likely to assume the same.
The ASA said: “We therefore considered that the ad should have made clear that the fee would always need to be paid, even if the property was not sold and potentially before any sale was complete. Because it did not do so, we concluded that it was misleading.”
The ASA told Purplebricks “to ensure they made clear immediately and prominently that their viewings service had a separate fee, payable in addition to the £849 ‘standard’ price, and that fees would always be payable whether or not a consumer’s property was sold and potentially before a sale was complete”.
A Purplebricks spokeswoman said the agency would appeal against the ruling.
She said: “At Purplebricks we strive to ensure industry-leading levels of transparency by offering customers certainty of what they will pay to sell their house before they go on the market and a choice around whether they pay for our viewings services or undertake the viewings themselves.
“Our customers know their homes best and 60% of them choose to show potential buyers around themselves and save some money. Those who are too busy, or who prefer to leave it to our experts, pay a one-off £300 viewing fee to cover unlimited viewings. Customer choice has been a clearly communicated mainstay of our proposition and will remain so in the future.”