NEWSFLASH: Purplebricks boss defends ‘exaggerated claims’ allegation by BBC programme

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 if they went for the deferred payment option.

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.

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47 Comments

  1. dave_d

    Fantastic

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  2. surrey1

    83% may have sold, but 70% of them weren’t with PB. Still on 0% in my patch.

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  3. Garret2

    Am I the only one looking forward to hearing CyberDuck’s contrarian comments on this one?

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    1. cyberduck46

      Well I can see a few things to contradict but I’ll wait to see what the program says first. It sounds a bit lame so far.

       

      Perhaps they could go undercover to see what traditional Estate Agents are getting up to. How many mention the commission rate, length of contract and whether it is a rolling contract for example 🙂

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      1. Chris Wood

        There are plenty of individual bad eggs in the high street world but this is Purplebricks PLC (set up and run by a solicitor) and its many ‘property-expert’ franchisees we are talking about.

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  4. StatementOfFact

    “Highly trained”. Still persisting with that are they, whilst running adverts for people with no experience. And so highly trained they make basic errors and lie to their clients. Great service.

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  5. MortgageStu19

    The one downside to this is, like Ryanair, its more free airtime. There is no such thing as bad publicity and will only add to people talking about them.

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    1. Naysayer

      There is when you’re selling your house. Ryanair do get you to your destination at least.

       

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  6. Hillofwad71

    Share price has since retraced back to 465p after hitting 524 p  just over a week ago   There will be anumberof recent recruits (experts) given sub -territories or rural beats where instructions are thin on the ground .

    They will be working overtime to hit their targets  desperate to get instruction at all costs .

    Chckens coming home tot roost The public finally coming around to the fact that the whole idea is to sell  your house for the best  price not the cheapest fee orhaving some online firm of conveyancers foisted onto you should you defer and incur a debt to Close Brothers   win,lose or draw !

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    1. cyberduck46

      It will be interesting to see what happens to the share price and the number of instructions after the watchdog program. £5.24 to £4.65 could just have been a correction after rising from £3.70 (ish) over the period of a month.

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  7. Naysayer

    ‘and the walls came tumbling down….’

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  8. AgencyInsider

    I see there is an ’email to a friend’ button at the end of the story. Maybe that is just what we should be doing – to every vendor we did a val for and who we know went with PB.

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    1. Andrew Overman

      Mines going on a blog for the website.

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    2. Philosopher2467

      If a vendor decides on utilising PB then ‘rubbing their nose in it’ is an option but probably not one to win you their business I suspect. There is merit in ensuring that all are aware of the downside of paying the full fee upfront and, if they feel  they have been mislead, asking for a refund!!!!!! Transparency is absolutely necessary when paying in advance for a service! Trading standards should be paying close attention to any organisation taking money in advance be that PB or any other. This has the potential to damage further the reputation of an industry which remains poorly regarded by consumers.

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  9. comment75

    its a bit like the UK version of whats happening to Donald Trump! Purplebricks have been blowing their trumpet about No commission and no commisery is coming back to haunt them now. here is a very interesting point made about Close Brothers contract

    https://www.allagents.co.uk/review/252437/

     

     

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    1. AgentV

      Seems like a good honest common sense review…..worth sticking up on twitter for everyone to retweet……if it wasn’t for the advert for emoov above it!!!

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  10. Philosopher2467

    It appears that the truth is starting to emerge into the public domain. I suspect the 83% is the number of people who had paid and not that ‘purplebricks’ sold. The vehicle has its merits however, where it requires  payment whether it works or not and there is a suggestion of ‘miss selling”, the media should make it clear to consumers that using PB can be more expensive than using a traditional agent. Once PB has your money, then the motivation to sell, service or engage meaningfully with the client is between low and nonexistent. Investors beware: wheels looking a tad loose and wobbly!!!!

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  11. RealAgent

    Got any of that popcorn spare Chris?

    I am delighted that this has picked up by the BBC though because I think until these firms come out state they charge regardless of outcome they will continue to deceive consumers.

    Purple Bricks I think are actually the worst in some respects because they did not start with deferred payment, they started with upfront fees, the deferred payment idea was their way of muddying the water as they knew customers were hesitant about paying for potentially nothing. That isn’t a firm offering choice to a customer in my opinion, it’s a firm trying to con them.

     

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  12. Philosopher2467

    Every barrel has a bad apple or two. I wonder how PB monitor their LPE’s? If they’re not then they should start, if they wish to avoid what could be an avalanche of negative publicity that a spot on ‘watchdog’ can create!!!!

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  13. AgentV

    Don’t you have to have a Consumer Credit Licence to arrange or facilitate loans for people?

    Was going out to see Dunkirk tonight…..oh dear….Dunkirk or Watchdog???

    One story about hundreds of thousands of heroes facing obliteration after risking their lives to fight for truth, justice and freedom the other about…..

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  14. drakeco75

    Think Richard Jacques may have sold his shares at the right time!!

     

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    1. AgentV

      Could he have known about the story coming?

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    2. Chris Wood

      It wasn’t just me who thought that then? Clever man.

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  15. Philosopher2467

    Share price down 10%. Makes no money and the ‘halo’ has slipped a tad! Still the ‘next big thing’? Or the next ‘lastminute’, as predicted?

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  16. Shaun77

    I do hope the programme picks up on the 83% point.

    As in true PB tradition, I think they are twisting the facts once again and trying to suggest that 83% of their instructions sell through PB in 10 months as opposed to using and selling through another agent and then paying off the finance agreement.

    Even on this basis, the 83% figure seems high as listing to completion ratio for the industry is only around 60%, I believe.

     

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  17. paulnewboy26

    At last. Extracts of this now going on our facebook page with a “boost” to maximise BBC viewing figures!!!! Spoke to many traders last night (before this broke) who are all saying they are staying clear of PB stock, too risky, too higher value and you guessed it….zero profit. Local vendors in this area are way to clever to fall for the tactics too…..maximise the impact everyone.

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  18. revilo

    Queue music!

    “The King is in the altogether, the altogether, the altogether………….. ‘

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  19. Malcolm Barnard

    Michael Bruce on R4 “we lead the way in clear & transparency”. 3 upheld complaints & 4 informal resolutions with the Advertising Standards Authority suggests otherwise.

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  20. StanLaurel35

    Let’s face it, investors will buy shares regardless of the business profile. If they think shares will rise they will buy, if they think they will fall they will sell. They aren’t in this for morals they are in it for money. This could be the start of a severe drop. I for one will be be glued to my TV at 8pm tonight. My monthly newsletter will also have a link to the Watchdog show.

    Down 5% today.

    Oh now 9% and falling!Now 11%…Best the Bruce brothers start buying to install confidence.

    It just gets better AgentV

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    1. AgentV

      12.16% down when I just looked!

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      1. AgentV

        10.84% just now…somebody must be buying!

        ?Cyberduck

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        1. AgentV

          12.29% ….sold them already?

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  21. smile please

    I feel like it is Christmas.

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  22. revilo

    ‘Trained better than anyone, we believe, in the industry’

    I really don’t think so Mr Bruce!

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    1. Chris Wood

      Quite! Substantiate that claim as the CEO of a PLC Mr Bruce!!!!

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  23. htsnom79

    Beautiful.

    I am sick to the back teeth of going home stressed because I’m going hard at the pipeline trying to get my clients ( clients, not customers or consumers CD46 ) exchanged while these chancers do naff all when they are in my chains, they are nothing more than a black hole of information and an impediment  to the whole point of being in this industry in the first place Grrr

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    1. AgentV

      But of course, the CEO doesn’t believe in doing anything more to help completions other than ‘letting the solicitors just get on with it!’

      Of course we all know that’s because once the property is listed they have taken (I was going to say ‘earned’ but that is pushing it) their fee, and to do anymore than that costs them extra time and money.

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  24. paulnewboy26

    -16.72% down…….yummy

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  25. AJW

     
    Increasingly these days I go up against PB on many an appraisal and it’s frightening how the vast majority of people I see have no idea to the fact that if they defer PBs payment then the ‘debt’ is actually with a finance company and all that goes with it.  Many are simply swayed by the headline figures and it seems the small print of T&Cs are simply lost within the online content  (e.g. do any of us ever read the T&Cs fully when we update our iPhone for instance, no you just trust Apple and click agreed!). 
     
    Hopefully though some are beginning to wake up and smell the coffee – we shall see.
     
    Oh and to raise a smile here’s a link to allAgentsco.uk (love em or hate em) but have you seen the poor reviews PB are getting on here and now the Close Brothers aspect is finally gaining notoriety, some people are spitting…   https://www.allagents.co.uk/purplebricks/

     

    And a few other recent reviews from ‘happy’ customers – http://forums.moneysavingexpert.com/showthread.php?t=5678099https://www.aspokesmansaid.com/complaint/5762b4b58099eb1bb49ef4a9/after-10-months–800-bill-for-doing-nothingStart to look around the web and you begin to find many…

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  26. AgencyInsider

    As you tuck into your delicious supper this evening – with an extra helping of Watchdog on the side, spare a thought for all those poor LPEs who will be attending their valuations in the morning and having to explain to Mr & Mrs Vendor that perhaps all is not quite as it might have seemed.

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  27. Property Pundit

    I don’t know which is going to be more entertaining, the expose on BBC television right now or the responses to your first post PurpleAndProud. Popcorn ready.

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  28. htsnom79

    Lol, a grand at least to put it on the internet on your own, it’s almost a  positive for those of us who know what we’re doing 🙂

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  29. StanLaurel35

    just watched it, better than expected.

     

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  30. Property Pundit

    Why on earth did PurpleAndProud delete their first & only (& lengthy) post from about 7.30pm before the programme?

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  31. Woodentop

    And now over to the regulators to start investigations. Share price drop by another 25% by the weekend and even further if the city watchdog gets involved? Conmisery is about to inpload. Just wait till the yanks get to hear.

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  32. swpfc94

    http://www.bbc.co.uk/news/business-37677444

    It is up to all decent ‘proper’ estate agents to capitalise on tonight’s Watchdog report. The NAEA and TPO will not do their job properly, it beggars belief that PB are allowed to be members! The real enemy (RM) might have to have a good think about their future strategy, but as I say, it is up to us to forget our apathetic nature and press home the education of the public.

    Share the negative features on PB on your websites and FB accounts.

    Refuse to register PB vendors onto your mailing list.

    Help and encourage the many customers that have complaints about PB to put negative reviews on Trustpilot (in the hope that they don’t get deleted!).

    Incentivise your clients to report PB to the TPO and ASA.

    Highlight the fact that your ‘Local property expert’ for PB is a traffic warden by day and ‘expert estate agent’ in a 30 mile radius working purely by email (in an area covered by 500 individuals working for proper estate agents, each having infinitely more experience than the PB ‘expert’).

    Expose PB for not having any infrastructure or desire/need to deal with after sales.

    Perhaps be bothered to write to your MP and ask her to look into the farce that is PB.

    Laugh at Mike Bricks squirming on a live show.

    Rage, rage – whilst there is still daylight.

     

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