ASA Adjudication on tinyfees.com
P O Box 125
25 April 2012
Internet (on own site), Leaflet, Regional press
Number of complaints:
A local press ad for tinyfees.com, an estate agent, seen in October 2011, stated "Want to sell? we're 20% cheaper than anyone else in the area - guaranteed".
Red Homes Ltd (Red Homes) challenged whether the claim "20% cheaper than anyone else in the area - guaranteed" was misleading and could be substantiated.
CAP Code (Edition 12)
tinyfees.com (tinyfees) said they were a new internet-based estate agency operating in a very small area around Honition in East Devon. They said the only newspaper advertising they undertook was in their local free newspaper which was delivered to homes and businesses in Honiton and several other nearby towns in East Devon and was therefore extremely local.
tinyfees said they charged a commission of 0.75% of the final selling price as did the complainant who was their major competitor. tinyfees said they were not VAT-registered so did not charge VAT at 20 per cent whereas Red Homes did. tinyfees argued they could therefore claim to be 20 per cent cheaper. They said no other estate in the area charged less than them and they had received no other complaints other than from Red Homes.
The ASA considered that the claim "we're 20% cheaper than anyone else in the area - guaranteed" implied that tinyfees.com were cheaper than all other agents in the area by 20 per cent or more. We considered that such a claim required substantiation, with robust and recent comparative market data which showed the rates of commission and fees charged by all the agents operating in the area and which demonstrated that tinyfees were 20 per cent cheaper than all of their competitors.
We noted tinyfees' argument about the effect of VAT however we considered that the VAT status of tinyfees or their competitors would not be sufficient to substantiate a claim that the actual gross commission charged by tinyfees was, in all instances, 20 per cent less than that charged by all other agents in the local market. We also understood that when using a higher VAT-inclusive rate as a basis for comparison, they would be 16.7 per cent, rather than 20 per cent, cheaper.
Because we had not seen evidence that tinyfees were 20 per cent cheaper than all of their competitors, we considered that the claim had not been substantiated and was misleading.
The ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.7 (Substantiation), 3.38 (Other comparisons) and 3.39 (Price comparisons).
The claim must not appear again in its current form. We told tinyfees to ensure they held robust substantiation before making comparative claims.