Purplebricks was put under the spotlight today in the BBC’s You and Yours programme. It is also to be featured tonight on BBC1′s Watchdog.
In You and Yours, it was said that Purplebricks was making ‘exaggerated’ claims and that it was repeating claims in emails that the programme had seen, and which had been banned last year by the Advertising Standards Authority.
In particular, presenter Winifred Robinson said the ASA ruled that a claim to save vendors £4,158 if they used Purplebricks as opposed to a high street agent had not been substantiated. But, said Robinson, the claim was being repeated.
She asked Watchdog presenter Steph McGovern why she had investigated Purplebricks. McGovern replied that it was because “loads” of customers had contacted Watchdog to say they were unhappy.
She said that the deferred payment option required vendors to enter into an agreement with Close Brothers, but alleged this was not always made clear.
Watchdog went undercover at five different properties around the UK and invited a Local Property Expert to visit. In three of those five cases, the agent failed to mention that the sellers would be entering into a credit agreement with a separate company.
In one case, a LPE had claimed to list 20-25 properties per month, but McGovern said the agent was actually listing between eight and 11.
Purplebricks co-founder Michael Bruce was interviewed on the phone. He said that LPEs were highly trained to be clear and transparent.
He said that the £4,158 claim had been removed from “over 1,000 different places” after the ASA’s ruling.
He had last night been sent a copy of an email showing the claim still being made, and said that this claim was also quickly removed. He said that it was just one, general email, but Robinson told him she had seen it in “multiple emails”.
He said that the LPE who claimed to be listing up to 25 properties a month could have been referring to the number of listings made by himself and colleagues.
In terms of the agreement entered into with Close Brothers, Bruce said all vendors were made well aware of this. Asked whether this was really a loan by another name, Bruce called it “an unregulated facility agreement”.
Robinson said she had not been able to find detail on the website as to how long people continue to owe Close Brothers. Bruce said the loan was repayable at ten months, or on the sale of the property.
Pressed by Robinson as to how many people continued to owe the money after ten months when their home had not sold, Bruce said that 83% of people had sold by ten months.
Watchdog is on BBC1 at 8pm.