Online agent HouseSimple told to withdraw its cost-saving claim in TV advert

Claims about how much an online agent could save sellers have been banned by the Advertising Standards Authority.

HouseSimple – backed to the tune of £13m by Carphone Warehouse funder Sir Charles Dunstone and his business partner Roger Taylor – claimed in TV advertising that it saved customers an average of £5,000 in fees.

The claim had been passed by Clearcast, the body that decides whether TV advertising can be broadcast.

The TV advert was one of two issues investigated by the advertising watchdog.

The other was a section on HouseSimple’s website (see screengrab below) which said: “High street estate agent fees are usually worked out as a percentage of the final sale price of your property.

“This can range from 1.5% to 4% (plus 20% VAT – which often isn’t clearly highlighted as an extra cost), adding up to an average bill of £5,247.”

It added that online estate agents were “much cheaper”.

The ASA received two complaints.

One complainant believed the average estate agent fee was 1.3%, and challenged the claim of 1.5% to 4%.

Both complainants challenged whether the savings claims were misleading and could be substantiated.

HouseSimple said that the range of 1.5% to 4% was based on a HomeOwners Alliance article, which referred to a mystery shop of estate agent fees and a 2011 survey by Which?

HouseSimple and Clearcast said that the savings claims were based on a survey by HouseSimply of 391 of its customers who had received a quote from a high street agent before switching to HouseSimple and had sold their house with them. That survey, in May 2016, was sent again last December.

In relation to the claim “much cheaper”, HouseSimple said that despite the ambiguity of the claim “much”, for the majority of the UK, even on the lowest scale of the high street commission rate, a seller would still save a significant amount by using HouseSimple. Using the UK average house price of £220,713, according to the government house price index, and an extremely low high street commission of 0.75%, would yield a fee of £1,655 against their highest fee of £995 and would still achieve a saving of 40% which HouseSimple considered to be “much cheaper”.

However, the ASA upheld both complaints.

It had previously concluded that the 2011 Which? survey was not adequate to support an average commission figure of 1.5% to 1.8%.

The HomeOwners Alliance article actually said that fees of 1% plus VAT could be achieved, or be even lower in some cases.

HouseSimple’s own customers reported having received quotes of 1% or less.

On the second complaint the ASA said consumers would conclude that HouseSimple was providing similar services to high street agents, and saving on average £5,000 in fees.

However, the ASA said high street agents provided other services including accompanied viewings as part of their fee, whereas HouseSimple did not, and would charge extra.

The ASA also said that HouseSimple’s survey of its customers was not robust: the survey was not weighted for different parts of the country or for different types of property, where house prices and estate agents’ fees varied.

Both of the adverts were banned.

A spokesperson for the ASA told EYE that the body does not keep records of instances where the ASA bans an advert previously approved by Clearcast, but thought these would be rare.

Niamh McGuinness, head of copy clearance at Clearcast, told EYE: “The ASA has ruled that further qualification is necessary to support the advertiser’s claims. We’ll work with the advertiser to ensure future ads comply with this ruling and to ensure they get on air and stay there.”

Yesterday, the TV advert could still be seen on YouTube:

https://www.youtube.com/watch?v=Iwg8dm-sSfs

EYE reported only on Monday that HouseSimple had removed two claims from a promotional email.

At the end of July, HouseSimple said on Twitter that its savings claims had been independently verified – a reference to Clearcast’s earlier approval.

Last year, Purplebricks’ claim to save vendors an average of £4,158 was banned by the ASA – although it emerged in BBC’s You and Yours and Watchdog programmes  that the claim was still being made in emails until this month.

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25 Comments

  1. sb007ck

    Call centre agents are always quoting Clearcast as the authority in qualifying advertising, but we now clearly see that they dont check everything properly. What sort of shower feels that a statistic from 8 years ago, and an article on an estate agent bashing website provides enough validity. I guess if Clearcast didnt clear these adverts they wouldnt be worth having around

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    1. AgentV

      Clearcast are clearly quickly becoming a joke….the same as certain online review sites…..very easily manipulated!

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      1. Bless You

        i love the wayPIE are already writing tomorrows headlines, ready to throw them to us like red meat to lions.

        I find purple steak gets the most interest. Nothing else matters now. If one thing pb have done its bring agents closer together in our fight for the truth..(tears)  …bless you PIE.

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  2. RealAgent

    I love these articles because with every case reported, these firms move themselves closer to the time where all they will be allowed to say is:

    “We will charge you to market your property and we probably won’t sell it” 

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    1. AgentV

      In other words the truth rather than a pack of ….!

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      1. Bless You

        it also exposes how these toff , jobs for the boys regulators are useless. We shoild all get together and sue them all for loss of earnings while the onliners have basically taken the p#ss out of them for last 3 years with insane adverts.

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  3. Chris Wood

    Misleading potential and actual customers to obtain business is deception and that is…..

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    1. Robert May

      breaching both CPRs and BPRs.

      Not sure what the prize was but could you put it on ebay and send the proceeds to NTSEAT to help them fund policing both?

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      1. Chris Wood

        I was thinking of a slightly weightier legal matter but, you are correct of course 😉

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        1. Robert May

          Isn’t it funny how in sport people representing the Nation wouldn’t dream of cheating yet when it comes to business they will happily cheat and think nothing of it?

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    2. Bless You

      was this your work Chris? I remember u quoting the 1.3% figure. Keep up the good work. The blind sheep and ‘protectors’ of our industry who put profit before rightousness bless you.

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      1. Chris Wood

        On this occasion, no, though I have quite a number of closely related past and on-going questions raised with the ASA and other organisations.

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    3. AgentV

      If a Vendor engages an ‘ONLINE LISTER’ to sell their property off the back of one of their ‘inflated savings claims’ and then finds out the average local high street fee is much less than was quoted in the claim, shouldn’t they have the right to sue for the difference…especially if they didn’t sell anyway?

      If the ASA told everyone claims like this could be upheld, then the online listers would soon alter their figures to realistic localised ones!

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      1. Bless You

        All we need is disclaimers on adverts like the car industry.

        WE WILL SELL YOUR HOUSE FOR FREE:

        disclaimer: we will ask you to review our site just after we take photos and when your happy, you pay us even afte we have spent your fee on getting more suckers to use us, we dont do the viewings and even when we do the local rep will cancel your online viewing becuase hes picking up the dog from the kennels for his mum and we havent got any other staff, we might sell your house but you pay us anyway, you might lose 1000’s on your property as we have no motivation to achieve a higher price, we are real estate agents but nothing like it, our next business will be online surgery,,just like a real surgeon but we sit in a call centre and tell you how to replace your kidney with some scissors by yourself.

         

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        1. AgentV

          Bless You……you never cease making me laugh 😉

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  4. MarkRowe

    I love how intellectually challenged this online agent is…

    Using the UK average house price of £220,713, according to the government house price index, and an extremely low high street commission of 0.75%, would yield a fee of £1,655 against their highest fee of £995 and would still achieve a saving of 40% which HouseSimple considered to be “much cheaper”.

    What a laughable response. If you consider this to be “much cheaper” surely that’s what you should advertise? Instead it was inflated to a rediculous percentage and that was the reason it was upheld, you flipping numpty.

    Right, I’m getting back to my breakfast I’ve had my daily dose of idiots this morning – it makes me feel superior.

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  5. AgentV

    What’s really interesting in this article is the reference of the ASA to weighting the claims in different parts of the country. When average fees in many areas are less than £3,000 how can anyone claim average savings of £5,000!

    #Cynicalmarketing

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  6. Thomas Flowers

    Good result  ASA!

    How about PB’s existing claims next:

    Header on PB’s website this morning still saying ‘Proper Estate Agents’.

    How can PB’s LPE’s be regarded as Proper Estate Agents when they get paid more to list a property than sell it?

    ‘Commisery’ I guess PB can not call it a commission as those 1000s of unsuccessful customers who still have to pay the same amount may take exception to paying a commission for a service that does not complete?

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    1. Bless You

      They still have the misleading fee graphic as well showing you how much you can save. ASA need to make them put average fee for postcode as well.

      User puts postcode in

      Then the fee calculator tells you how much you can save in your area.

      —-  Hopefully this will cause so much red tape for the onliers they give up on this one.

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  7. Property Paddy

    The count down has begun:

    Online call centre agents will ultimately win out because it turns out their target audience are simple folk wishing to sell their home and not pay an estate agent any money whatsoever cos they are money grabbing barstuards with morally & indefensibly loud neck ties.

    In the same way 52% of the population voted to leave Europe thereby giving Brexit the ultimate win.

    The fact that the UK is going for custom free boarders and the other side have stated customer free boarders comes with one unbreakable condition of unrestricted people movement.

    Oh and lets not forget today we launched a huge aircraft carrier that even (and I’m guessing here) North Korea could probably take out with one of it’s ICBM’s,  talk about a bit of navel gazing.

    Conclusion:
    On line agents misrepresent the truth.

    Politicians misrepresent the truth.

    Oh and we have a large boat that will be out dated before it’s operational in 2023

    The only real crime the estate agent did was wear awful clothes.

     

     

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    1. Robert May

      If that’s the case I will enjoy a very lucrative retirement I’ll set up a PPI style (disruptor) law firm to no win no fee punish any digression from established case law.

      Contract Law (agency) clearly sets out some fairly onerous and, for internet listing reps, challenging criteria that have to be met in order to be an agent. Being a passive intermediary lister is one thing but taking responsibility for duty of care and skill means listers can’t simply look up what the random number generators reckon the selling price should be.

      While  faux agents only have limited market share and are doing all they need to build the sort of reputation they deserve there isn’t enough business to set up such a firm but if the home owning public is a simple as you reckon it might be worth a bit more serious investigation.

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    2. Bless You

      Remember though that 95% of our customers can smell a rat and dont use the purplesh*ts. And we can also walk into homes now with head held high saying we didnt lie to launch our business or get told off by watchdog to get there.

      I am much more positive about it now. It felt like #fake world had come to estate agency but thankfully we are blessed by the truth every now and then,.

       

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      1. htsnom79

        I’ve never been hugely worried bless you, partly because of call centre agents lack of traction on my patch and mainly because of CPL, in the event that PB et al become the de facto method of selling your home I will either walk away shaking my head or make a boutique living doing it properly, countrywide property lawyers were the pre broadband PB and they were *****, team this team that, no local knowledge and no empathy, Indies shop in the shops dance in the club’s and drop off at the school gate, it’s what we are not what we do

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  8. drakeco75

    2011 survey, since then we’ve had two elections and a referendum, Donald Trump in the Whitehouse, Bruce Forsyth leaving strictly and Sir Roger Moore sadly passing and I’ve turned 50.

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  9. PeeBee

    Hang on…!

    As can be seen on the screenshot above, it clearly states

    “High street estate agent fees are usually worked out as a percentage of the final sale price of your property. This can range from 1.5% to 4% (plus 20% VAT – which often isn’t clearly highlighted as an extra cost), adding up to an average bill of £5,247.”

    That paragraph now reads

    “High street estate agent fees are usually worked out as a percentage of the final sale price of your property. Estate agents commission can range from 0.75% to 3% (there is also VAT payable on estate agent fees at 20%– which often isn’t clearly highlighted as an extra cost) according to a May 2016 survey of 391 HouseSimple customers.”

    However clicking the next box down the index list – ‘Save £1,000’s with HouseSimple’ – the blurb goes on to state this claim:

    “At HouseSimple.com, we’ve saved clients across the UK millions of pounds against the fees charged by high street agencies. The homeowner saves an average of £5,594 when selling with us, while the average landlord saving is £1,877. However you look at it that’s a lot of money… just imagine what you could do with it.”

    Someone please explain to me how the chuff ASA can just ignore this blatant ‘inaccuracy’ by HouseSimple…

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