The Advertising Standards Authority (ASA) has upheld two complaints made against emoov.co.uk.
The website www.emoov.co.uk promoted an online estate agent. Text on the “How it works” page, under the heading “Our team negotiate a great price”, stated “eMoov outperforms UK and London estate agents’ average by 3% (Source: Hometrack) Our expertise will help you pick the right buyer. Each one is verified and every offer is qualified for financial authenticity. We then negotiate the highest possible price for you, informing you of any updates along the way. It’s your decision to accept or reject an offer. Our sales performance in 2014 shows that on average we achieve sold prices of 99% (103% in London) of the asking price. This compares with the national average of 96% of the price (says Hometrack)”. Text on the page entitled “Why eMoov” stated “These days, most homes are sold via the major portal sites regardless of the agent involved. This is why more and more people are now turning to eMoov.co.uk to save millions of pounds in fees … Our business model depends on us selling a higher proportion of our inventory … Our customers have saved – £11m+”.
PDQ Estates Ltd challenged whether the claims, under the heading “Our team negotiate a great price” misleadingly implied that eMoov sold properties at a higher price than traditional high street agents, when they understood that was not the case; and secondly, the cliam that eMoov had saved their clients over £11 million in fees were misleading and could be substantiated.
Regarding the first complaint, eMoov Ltd refuted the complainant’s suggestion that the claims referred to implied that eMoov would achieve a higher selling price for a property than a typical high street estate agent. They said it was not their intention to claim that, as it was inconsistent with their approach. They believed that the wording used made it clear that the claim related to the percentage of the asking price achieved. They understood that the complainant’s concern was rooted in the belief that eMoov would advise consumers to offer their properties at a lower price than a high street agent. eMoov said they did not choose the asking price at which to market a property, and highlighted that the asking price was set by the seller themselves, following consideration of guidance on the market value. The implication behind the complaint was that eMoov could somehow manipulate the asking price in order to achieve a more favourable percentage. They thought that was unrealistic, however, as they could not persuade a seller into setting a lower than market-rate asking price, (given that they would be looking to achieve as high a sale price as possible). In addition, because they did not receive commission on the sale price achieved, there was no advantage for eMoov if a sale price was below market value. In contrast, they said traditional estate agents were incentivised to set a higher asking price, given the possibility of a higher commission payment, and that could lead to agents putting pressure on sellers to set an unrealistically high asking price that was above market rates. They believed that that accounted for the discrepancy between the average percentage of asking price achieved by eMoov and the average high street estate agent.
eMoov explained that the figures quoted related to the period from January to September 2014. Because they had compared their own figures with the average performance in England and Wales, they provided data to show that they were a ‘national’ agency and had represented clients, and sold properties, from across England and Wales since their launch and in the period January to September 2014 specifically. They also provided evidence to show that from January to September 2014, they had achieved an average of 99% of the asking price, in comparison to the national average of 96%. Finally, they said they had removed the reference to their performance in London as it was no longer accurate.
The ASA considered that most consumers would understand the claims under the heading “Our team negotiate a great price” as a statement of how eMoov worked for their clients to secure the best price. It noted that the text stated that on average eMoov achieved sold prices of 99% of the asking price, whereas the national average was 96%. We considered most readers would understand those claims to mean that, on average, eMoov achieved a higher percentage of the asking price than the average high street agent, as opposed to a statement regarding eMoov’s ability to secure a higher price for a property, in comparison to high street competitors.
The ASA considered that while consumers would understand that the percentage of the asking price achieved by an agent would be linked to how ambitious or conservative the asking price was, they would be aware that the stated percentages did not give any indication of who was more successful in obtaining higher prices for their clients. Therefore, it considered consumers would understand the comparison to be indicative of eMoov’s ability to sell properties close to the asking price, rather than a statement regarding their ability to secure higher prices.
The ad watchdog reviewed the data supplied by eMoov to show that they were a national agency and were content that they had sold sufficient properties across England and Wales to legitimately compare their performance with the average performance of traditional estate agents across England and Wales. However, while it understood that the claims related to eMoov’s performance compared with the average traditional estate agents’ performance in London and across England and Wales, from January to September 2014, we noted that the website simply referred to 2014. Therefore, in the absence of any qualifying text to explain what period the claims related to, the ASA considered that consumers were likely to understand that the average percentage of asking price achieved by traditional agents in England and Wales in 2014 was 96%, in comparison with eMoov’s 99%, and that the average percentage achieved by estate agents in London for 2014 was 100%, while eMoov had achieved an average of 103%.
The ASA noted, however, that eMoov had only provided evidence related to their own and the average performance of traditional agents for England and Wales for the period of January to September 2014, and had not provided any evidence regarding the average percentage of asking price achieved by traditional estate agents in London for 2014. Therefore, it considered that eMoov had not substantiated the claims, and concluded that they were misleading, breaching CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.7 (Substantiation), 3.9 (Substantiation), and 3.38 (Other Comparisons).
Regarding the second complaint, eMoov said the reference to “over £11m” represented the total savings that they believed all eMoov customers had made by selling their house with eMoov, in comparison to the amount they would have paid if they had used local agents. The figure did not include the fees they had received from clients who withdrew their property and so did not complete a sale with eMoov. eMoov said they had used their sales data from 2011 to 2014 to work out the average price they had sold a house for per annum, and the average fee that they had charged their customers, including VAT. They had calculated a ‘typical comparative fee’ for each year, by multiplying eMoov’s average sale price by the average estate agency fee for that year. They then subtracted their average fee from the typical comparative fee, before multiplying the difference by the number of properties sold that year, to reach a saving figure for that year, and then an overall saving claim. They said they had used a different commission percentage for each year to calculate the ‘typical comparative fee’, which was based on a variety of independent sources including an Office of Fair Trading (OFT) report entitled “Home buying and selling” which has been published in 2010. eMoov said when calculating the total fees that they had charged their customers for each year they had been in operation, they had used their most popular fee (standard rate). However, they believed that when they took into account the various fee options they offered, they could still substantiate the claim if they took their 2010 sales data into account. They provided evidence to show that that was the case.
The ASA said it understood that the claim referred to the total amount of money eMoov believed their clients had saved as a result of selling their houses with eMoov as opposed to traditional high street agents. It noted that initially their calculations had just included their sales from 2011 to 2014, and that they had calculated the amount their customers had saved by multiplying their most popular fee for each year by the number of properties sold. They had then estimated the amount their customers would have paid in fees with a high street agent by multiplying their average house price for each year by the average national estate agency commission fee, plus VAT, which they had obtained from a variety of sources.
The ASA was concerned, however, that with the exception of the OFT figure, which had been applied to their 2011 sales data, the data sources were unreliable, as they stated a wide range for the average commission fee levied or were based on a very small sample.
Further, the ASA had concerns that eMoov had used their average fee as the basis for all their calculations rather than reflecting the fees that their customers had actually paid, which in some cases we understood to be double the standard fee. Although eMoov had subsequently provided more data showing the breakdown of the fee options taken up by their customers in 2014, and applied those figures to their previous sales, including 2010, the ad watchdog considered that to do so did not provide a sufficiently accurate figure regarding the fees that their clients had actually paid. Therefore, the ASA was concerned that the figures eMoov had used as the basis for their savings calculation, both for the average high street agency fee, and the fees that they had levied for their own customers, were not sufficiently robust. The ASA also noted that the savings claim was not qualified in any way to explain how the figure had been calculated, the years it related to, or the data sources that had informed their calculations.
For those reasons, the ASA concluded that the claim had not been substantiated and was misleading, with the ad breaching CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.7 (Substantiation), 3.9 (Substantiation), and 3.38 (Other Comparisons).
The ad must not appear again in its current form. The ASA told eMoov Ltd to ensure they held sufficient evidence to substantiate their marketing claims and qualified them appropriately in future.