Banned! Maverick agent must not repeat claims about Purplebricks

An agent from Cornwall who has waged a long-running campaign against online agencies in general and Purplebricks in particular has been told he must not make further unsubstantiated claims against competitors.

Chris Wood, who runs the single-office PDQ Estates firm, has been told by the Advertising Standards Authority that a blog posted on his website must not appear again in the form complained about. The same applies to a tweet that he posted on social media.

Specifically, he must remove his claim that “49.6% of customers lost> £1,000” and “Cheap agents could cost UK consumers up to half a £Billion in wasted fees”. 

More generally, the ASA has told Wood and his agency “not to make claims about how much money customers had lost to their competitors, unless they had adequate evidence to substantiate the figures.”

This is the latest in a string of controversies involving Chris Wood. 

Having successfully campaigned against portal juggling some years ago, Wood has more recently taken on wider issues, frequently issuing statements criticising the National Association of Estate Agents, the National Trading Standards Estate Agency Team and online agencies - in recent months this has focussed largely on criticism of Purplebricks. 

Ironically, he has also criticised the Advertising Standards Authority. In a tweet last year he accused it of having “no statutory teeth”.

Also last year he unsuccessfully attempted to get on the ballot paper as a candidate for NAEA vice-president; then, nine months ago, he quit the association, issuing a press statement containing allegations regarding unspecified cases of wrongful dismissal, bullying and payments which he says involved the NAEA. 

“I now shoot from the lip” he says on his Twitter profile.

His latest run-in with the Advertising Standards Authority follows a complaint about a tweet and a blog post made in the name of his agency.

The ASA says:

The tweet from Chris Wood, the Director of PDQ Estates Ltd, with the @PDQProperty twitter handle, dated 7 October 2017, stated "Mid & W Cornwall Oct 16 - 17. @PurplebricksUK listings: sold 50.4% i.e. 49.6% of customers lost> £1,000 (C£64,000).

The blog post on the website, blog.pdq-esates.co.uk, seen in October 2017 on the home page, and dated 15 December 2014, titled “Cheap agents could cost UK consumers up to half a £Billion in wasted fees”. 

The sub-heading stated “… the 60 to 70% of customers who didn’t go on to sell would have paid almost half a billion pounds to these firms for nothing”. The blog stated “… the hidden costs of putting your home up for sale with an on-line agent do not appear to have been calculated by many journalists or consumer champions and, has been conveniently left-out of these agents ‘savings’ calculations in their advertising literature. Put simply, if on-line agents had every property currently up for sale on Rightmove (1.2 Million homes) and sold a typical percentage of that stock (average industry norm’ for online agents is estimated to be circa 30% to 40% of stock) then the 60% to 70% of customers who didn’t go on to sell would have paid between £468,000,000 and £500,000,000* (half a billion pounds) to these firms for nothing”. 

The asterisk at the bottom of the page stated “assuming an up-front fee of £600”. In bold, italicised text, the blog then stated “Not much of a savings for the vast majority of their customers in my view”. The next paragraph then stated “The traditional high-street agent, however, would have charged all those unsuccessful customers a cumulative total of around £0.00”.

The complainant - not named by the ASA, as is standard in most of its judgments - suggested that Purplebricks’ properties that had not yet been sold would continue to be marketed until they were sold, and therefore challenged whether the claim "49.6% of customers lost> £1,000" was misleading.

The complainant also challenged whether the “Cheap agents could cost UK consumers up to half a £Billion in wasted fees” was misleading and could be substantiated.

Because of the interest in the long-running war of words between Wood and Purplebricks, we’re publishing the full ASA statement concerning PDQ’s response to the complaints, and at the bottom there is the authority’s final assessment and verdict:

Response

1. PDQ Estates Ltd trading as PDQ believed that consumers would interpret the claim to refer to the properties that PurpleBricks had not sold within a year.

PDQ submitted a set of Zoopla spreadsheets which showed the listed PurpleBricks properties on Zoopla in Mid and West Cornwall for the period of October 2016 to October 2017. They explained that PurpleBricks’ terms and conditions stated that all properties would be listed on all online portals, so the Zoopla figures showed all PurpleBricks properties in that period. They said the data showed that PurpleBricks had instructed 132 properties, withdrawn 75 properties and sold 65 properties during that period. They said that meant that 49% of listings instructed by PurpleBricks had been sold and 57% of the listings instructed had been withdrawn. They explained that the figures had changed slightly since the ad had been posted on Twitter. They calculated that based on the 57% of properties withdrawn, approximately £81,000 had been lost in fees following withdraws without a sale based on a £1080 average fee.

PDQ provided an updated spreadsheet during the investigation which they said showed the properties’ final or current status. They said the data showed that, out of the 100 properties listed during the period, 36 of the properties were listed as exchanged, meaning that 64% of PurpleBricks’ customers lost in excess of £1,000.

PDQ also provided a spreadsheet of all PurpleBricks’ instructions between 2014 and 2018 in the Mid and West Cornwall area. They said that showed that around 33% of PurpleBricks listings had been exchanged, while 55% of all instructions listed since 2014 were now marked as withdrawn. They provided a further spreadsheet of the number of instructions during 2016 to 2017 with different start and end dates. They said that showed that out of 63 properties that had been instructed, 51% had been sold.

PDQ provided further spreadsheets from Zoopla of instructed PurpleBricks properties between 2015 and 2017. They said they had cross-referenced those properties with the information on the Land Registry to see if PurpleBricks had eventually sold those properties.

PDQ cited published research, which indicated that PurpleBricks had sold 51.6% of the homes that it listed within ten months. They also showed that four of the properties on the spreadsheet were still listed as available or as sold subject to contract (not exchanged) on the PurpleBricks website and provided best price guides for some individual properties.

2. PDQ said that the claim was based on all online estate agents from 1 January 2014 to 4 November 2014 who had advertised on Zoopla in 2014, when the blog post was first published. They said that all online estate agents advertise all properties on all online portals, so the Zoopla figures encompassed all of the properties listed by online estate agents in the given period. They said that during the given period, 14 consumer’s homes were listed and the final/current status showed that only five of them were exchanged. 

They added that the figures did not account for any property that may have been subsequently sold by an agent other than those included in the spreadsheet, so the final figure could be even lower. They said the data supported the advertised claim within a substantial margin of error.

PDQ said that a more recent analysis of recent data by a respected source showed that online estate agents performed exceptionally poorly. They provided an image taken from a PowerPoint slide, which showed various online estate agents’ hybrid sales agreed success rate. The image indicated that 12 out of 13 estate agents had a success rate of below 50%.

PDQ also provided an infographic which reported that the main online ‘disruptors’ had a 1.01% market share between them, and that their instructions–sold ratio in the previous 12 months were all 25% or below. It stated that the average chance of selling with a disruptor was 15.9% and the average chance of selling with “traditional” agents was 58.64%.

Assessment

1. Upheld

The ASA considered that consumers were likely to understand from the ad that, between October 2016 and 2017, 49.6% of PurpleBricks customers in Mid & West Cornwall had each lost over £1,000 in fees that they had paid to PurpleBricks because PurpleBricks were unable to sell their property.

PDQ explained they had made the claim in good faith based on various sets of data obtained from Zoopla, which they had understood tracked all sales across the market for a given period, and calculated the percentage of PurpleBricks properties cited as withdrawn out of those that were cited as instructed. We understood from Zoopla, however, that the properties cited as withdrawn only reflected withdrawals from Zoopla.co.uk and primelocation.co.uk following instructions from the agent and could include properties that had been sold on other websites. We therefore considered that the properties which had been cited as withdrawn were very likely to include properties which had been sold on other websites, such as the PurpleBricks website.

We noted the two further spreadsheets PDQ provided which had cross-referenced the properties with information from the Land Registry regarding when that property had previously been sold. However, in one spreadsheet, the Land Registry data was incomplete, while the second spreadsheet was only comprised of properties cited as withdrawn. Furthermore, neither of the spreadsheets matched the list of properties instructed by PurpleBricks between October 2016 and 2017. We therefore considered that those spreadsheets could not be relied upon to determine the percentage of properties in that period that had been withdrawn without a sale.

We acknowledged the published research indicated that PurpleBricks had sold 51.6% of the homes that it listed in November 2016 within ten months. That did not mean, however, that those properties were never sold after those ten months, and those figures did not in any case relate to the period and region cited in the ad. In any case, because we had not seen the source of the figure, it could not be relied upon as evidence.

For those reasons, we considered that PDQ did not hold evidence that 49.6% of PurpleBricks customers in Mid & West Cornwall had each lost over £1,000 in fees because they were unable to sell their property. We therefore concluded that the claim was misleading.

On that point, the ad breached CAP Code (Edition 12) rules  3.1  (Misleading advertising) and  3.7  (Substantiation).

2. Upheld

The ASA considered consumers were likely to understand from the claims “cheap agents could cost UK consumers up to half a £Billion in wasted fees” and “the 60 to 70% of customers who didn’t go on to sell would have paid almost half a billion pounds to these firms for nothing” to mean that, based on a robust estimate, there was a reasonable probability that consumers had lost around £500 million in fees to online estate agents due to the agents failing to sell these properties.

We noted that the text in the ad clarified that the claim was based on an average of online estate agents selling 30% to 40% of properties. However, the infographic they provided was only based on the West Cornwall area, which we considered was not sufficient to make a claim about the whole of the UK market as there was no evidence that properties sold in West Cornwall would be representative of the UK. Furthermore, PDQ had not shown us where the figures in the infographic were taken from, so we were unable to verify them. Similarly, they had not provided verification for the data in the image of the PowerPoint slide.

PDQ had provided further data obtained from Zoopla to substantiate the claim. However, that data only related to 15 properties, which was not sufficient to support a claim about the whole UK market. Furthermore, as mentioned above, the properties which had been cited as withdrawn were very likely to include properties which had been sold on other websites, meaning that those customers would not have lost fees due to the estate agent failing to sell their property.

Because PDQ were unable to show that based on a robust estimate, there was a reasonable probability that UK customers had lost around £500 million in fees from online estate agents, we concluded that the ad was misleading.

On that point, the ad breached CAP Code (Edition 12) rules  3.1  (Misleading advertising) and  3.7  (Substantiation).

Action

The ad must not appear again in its current form. We told PDQ to remove the claims “49.6% of customers lost> £1,000” and “Cheap agents could cost UK consumers up to half a £Billion in wasted fees”. We told them not to make claims about how much money customers had lost to their competitors, unless they had adequate evidence to substantiate the figures.