The Advertising Standards Authority (ASA) has told Hampton Estates that an online advert outlining fees was misleading.
Claims on www.hamptons.co.uk, on a property listing, stated, “£1,200 per Calendar Month + £216 incl VAT admin fee per property + other fees may apply”. The text “+ £216 incl VAT admin fee per property + other fees may apply” was hyperlinked to a document which set out further details about related fees.
The complainant, who understood that it would not have been possible to rent the property without paying additional fees, challenged whether information about non-optional fees was sufficiently clear.
Hamptons Estates Ltd said the administration fee was the only fixed charge. They pointed out that there was a statement on each property listing that stated “+ £216 incl VAT admin fee per property + other fees may apply”, which was hyperlinked to a PDF document entitled “Charges and Information for Tenants”.
They said the document provided further details about other mandatory charges that might apply, including charges for obtaining references for the applicant. The document also stated “other charges may be incurred as part of the application process”, which referred to check-in fees. They explained the check-in fee would vary from property to property, depending on the size, whether it was furnished or unfurnished and the charge levied by the independent inventory clerk, which reflected factors such as their travel time, of which Hamptons were paid a percentage. They said the fee was calculated by the inventory clerk in its entirety at a later stage in the transaction and so they could not state the exact cost in either the hyperlink or PDF document.
They also explained that there was a reference fee of £54 per person or a fixed price of £120 for a company tenant. Given that they did not know whether a property would be rented by a company or not, or the number of tenants that would share a property, they could not state the exact charge within the hyperlink itself. They said there was a different fee structure for their Bristol branch. They applied an all-inclusive fee, combining the administration fee, referencing fee and check-in fee, which was the greatest of either 35% of the first months’ rent or £420. They said they would amend the document, providing details of the check-in fees on the first page.
The ASA considered consumers would interpret the claim “+£216 incl VAT admin fee per property + other fees may apply” to mean that the administration fee was the only non-optional charge and, while there may be further charges, they did not apply to all or most customers. The ASA understood, however, that with the exception of the Bristol branch, which charged one all-inclusive fee, there was a check-in charge which applied to all customers and was dependant on a number of factors. The ad watchdog said it noted that Hamptons allowed consumers to search for ‘unfurnished’ or ‘furnished’ properties, and would therefore have an understanding of the scale of the inventory upon check-in. They would also be aware of the size of a property, including the number of bedrooms, reception rooms, any outdoor space and so forth, prior to putting it on the market.
However, the ASA also understood that the fee was dependent on which third-party check-in clerk was available and their fee, which incorporated their travel time to the property in question, which would not necessarily be known when a property was marketed. In light of that, the ASA considered that the check-in charge was a non-optional fee that could not be calculated in advance. CAP Code rule 3.19 stated “If a … fee cannot be calculated in advance … the marketing communication must make clear that it is excluded from the advertised price and state how it is calculated”. It noted that there were no details about the additional fee, or how it was calculated, on the listing page or in the document that linked to the ad.
The ASA also understood that, for branches other than Bristol, tenants would have to pay a referencing fee which was either £54 per person or £120 per property for a company tenant. Given that the fees were fixed, it considered that they were calculable in advance. CAP Code rule 3.18 stated “Quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers”. While the ASA acknowledged that details of the charge were included in the document that linked to the listing, it considered that the ‘per person’ and ‘per company’ charges should have been stated alongside the quoted price.
Because the quoted price did not include all non-optional fees that could be calculated in advance, and the ad did not make clear that other non-optional fees, that could not be calculated in advance, applied or how they would be calculated, The ASA concluded that the ad was misleading, breaching CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.17, 3.18 and 3.19 (Prices).
Hamptons Estates Ltd was told that its ad must not appear in its current form and also told to ensure quoted prices included non-optional charges that could be calculated in advance, and that their ads made clear if other non-optional charges, which could not be calculated in advance, applied and how they were calculated.