UK-based online real estate agency Purplebricks has had one of its ads banned by the Advertising Standards Authority for “misleading customers”.
The ad featured testimonials from customers in which they claim how much they saved in fees by using Purplebricks’ services.
Purplebricks said it estimated the savings based on an assumed estate agent fee of 1.8 per cent of the sold price of a property, compared to the £798 fee it charged to property sellers outside of London in 2016. The assumed rate of 1.8 percent was based on a customer survey.
The company added that it believed its advertising “was not misleading”, but it amended its web page to avoid doubt.
Despite this, the ASA upheld the complaint.
The regulator said it acknowledged the evidence provided by Purplebricks in support of its testimonials, but added that it was “concerned” that this evidence was not adequate to support the basis of the fees saved comparison.
“We noted Purplebricks’ explanation that the comparison was against the fees charged by ‘traditional high street estate agents’,” the ASA said.
“While we considered consumers would understand that the comparison was made against fees charged by other estate agents, we considered it was not clear from the ad that the comparison was being made specifically against ‘high street’ estate agents.”
It was ruled that the Purplebricks ad should not appear in the form complained about again. The company was also told to ensure ads which made comparisons provided sufficient information.
The news comes as Purplebricks’ revealed an increase in its revenue in the UK, which is up 132% to £43.2m, according to its annual results for the year ending April 2017.