ASA Adjudication on Hilton King & Locke
Hilton King & Locke
64 Clarendon Road
Watford
Hertfordshire
WD17 1DA.
Date:
13 June 2012
Media:
Circular
Sector:
Property
Number of complaints:
1
Agency:
Estate Agency Logic
Complaint Ref:
A12-189204
Background
Summary of Council decision:
Three issues were investigated of which two were Upheld and one was Not upheld.
Ad
A circular, distributed by Hilton King & Locke (HKL) stated "UP TO 10% HIGHER SALE PRICES THAN OTHER LOCAL ESTATE AGENTS* We are confident that no other estate agent will work harder to sell your property for the best possible price than we will ... We are the only local estate agent open seven days a week ... All our staff at Chalfont St Peter office have at least 12 years [sic] experience ... *We are able to provide a number of examples where we have completed sales on properties with a sale price of up to 10% higher than the figure at which other local estate agents initially valued the property". The contact details for an office based in Chalfont St Peter were included. A number of properties marked 'sold' were featured on the back of the circular, with text that stated "The sale prices we achieve are often significantly higher than other local estate agent's valuations".
Issue
Hamptons International challenged whether:
1. the claim "UP TO 10% HIGHER SALE PRICES THAN OTHER LOCAL ESTATE AGENTS" was misleading, because they maintained that prices were not up to 10% higher than the local Hamptons International's valuations;
2. the claim "We are the only local estate agent open seven days a week" was misleading, because Hamptons International and other agents in the local area were also open seven days a week; and
3. the circular was misleading, because it was sent to a customer of Hamptons International, but did not make clear that there could be a potential liability for the vendor to pay two sets of fees in the event of a sole agent having already been appointed.
CAP Code (Edition 12)
Response
Hilton King & Locke (HKL) said they carried out a blanket leaflet drop to all Chalfont St Peter postcodes, but that no estate agent was specifically targeted with that leaflet. They said the purpose of the leaflet was to advertise their recent successes to home owners who were thinking of moving in the future.
1. They said they were able to provide a number of examples where they had completed sales on properties with a sale price of up to 10% higher than the figure at which other local estate agents had initially valued the property. They said the leaflet featured nine properties that they had sold and the vendors of at least three of the properties featured had previously told them that the initial valuations they had received from other local estate agents were significantly lower than theirs and the subsequent sale price they achieved. They provided examples where the sales prices were 10.8%, 10.6% and 5.9% higher than a local estate agent's initial valuation and provided e-mails from some of the vendors in support of their claim. They said that, since opening, they had completed on 13 sales and two showed a sale price in excess of 10% higher than another estate agent valuation.
2. They considered that, in the context of a local High Street or village centre, 'local' was a person's closest High Street or village centre. They said there were six estate agents based in Chalfont St Peter village, two of which also had offices in Gerrards Cross, where Hamptons were based. They said that they were the only estate agent open seven days a week in Chalfont St Peter.
3. They said they had not intended to specifically target other estate agents' listings. They did not believe that it was part of current legislation to compulsorily feature specific text about the potential liability for the vendor to pay two sets of fees, in the event of a sole agent having already been appointed, on a leaflet which was not targeting specific properties. They said that many other estate agents did not feature that disclaimer.
Assessment
1. Upheld
The ASA noted that the claim "UP TO 10% HIGHER SALE PRICES THAN OTHER LOCAL ESTATE AGENTS*" was qualified by the text "*We are able to provide a number of examples where we have completed sales on properties with a sale price of up to 10% higher than the figure at which other local estate agents initially valued the property". Although we noted that the basis of the comparison was set out in the ad, we also understood that a valuation price could often differ from the final sales price achieved and therefore did not consider that it was a fair comparison. In light of that, we considered that the qualifying text contradicted the main headline claim "UP TO 10% HIGHER SALE PRICES THAN OTHER LOCAL ESTATE AGENTS".
We also noted that the documentation provided consisted of testimonials from some vendors regarding the valuations others agents had given them and considered that those testimonials should have been supported with independent evidence showing the initial valuations received. We also noted that the claim was based on 13 sales only, which we considered was a small sample in the context of property sales.
Because we did not consider that comparing initial valuations to completed sales prices was a fair comparison, and because we did not consider that we had seen sufficient documentation to support the claim "UP TO 10% HIGHER SALE PRICES THAN OTHER LOCAL ESTATE AGENTS", we concluded that the ad was misleading.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.3 (Misleading advertising), 3.7 (Substantiation), 3.11 (Exaggeration) and 3.38 (Other comparisons).
2. Upheld
We understood that the advertisers had delivered the leaflet to properties with Chalfont St Peter postcodes, but not properties with Gerrards Cross postcodes. We noted however that Chalfont St Peter and Gerrards Cross were very near to each other and considered that, in the absence of text which clarified what area or town was meant by "local", some consumers might infer that "We are the only local estate agent open seven days a week" would include those based in Gerrards Cross, where we understood that a number of estate agents were based.
We understood that Hamptons International and other agents based in Gerrards Cross were open on Sundays. Because of that and because the ad did not clarify what area was meant by "local", we considered that the claim "We are the only local estate agent open seven days a week" was ambiguous and concluded that the ad was likely to mislead.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.3 (Misleading advertising), 3.7 (Substantiation), 3.11 (Exaggeration) and 3.38 (Other comparisons).
3. Not upheld
We understood that Hamptons International maintained that the advertisers could exclude other agents' properties when leafleting properties, as applications existed which showed which properties were instructed to which agents. We understood that the advertisers had not specially targeted customers of Hamptons' International, but noted that some Hamptons' International customers in the local area targeted could have received the leaflet. We did not consider that it was in and of itself inappropriate for the advertisers to have delivered the leaflet to consumers who might be customers of Hamptons' International.
We understood that the Office of Fair Trading's (OFT) Estate Agency guide set out the terms of business for estate agents and the explanations that must be provided to vendors, for example with regard to 'Sole selling rights' or 'Sole agency'. We therefore considered that any consumers who were considering appointing a sole agent would be made aware of the relevant provisions when entering into that process and that those consumers who had appointed Hamptons International as a sole agent would have already been made aware of the potential liability for a vendor to pay two sets of fees in the event of a sole agent having already been appointed. In light of that, we did not consider that the potential liability for the vendor to pay two sets of fees in the event of a sole agent having already been appointed was a significant term that should be included in the leaflet distributed by the advertisers and therefore concluded that, on that point, the ad was unlikely to mislead.
On that point, we investigated the ad under CAP Code (Edition 12) rules 3.1 (Misleading advertising), 3.3 (Misleading advertising), 3.7 (Substantiation), 3.11 (Exaggeration) and 3.38 (Other comparisons), but did not find it in breach.
Action
The ad must not appear again in its current form.