Ad description

Claims on www.chrisandleonbuyhouses.co.uk, seen on 10 September 2016, stated "Need To Sell Your House Fast? Negative equity? ... Unlike other companies, we can pay up to 100% market value for your house! ... Sell Your House For Cash ... Up to 100% of market value ... Houses bought for cash ... Enter Your Information below to get your FREE CASH OFFER".

Issue

The complainant challenged whether the claims "we can pay up to 100% market value for your house!" and "Up to 100% of market value" were misleading and could be substantiated.

Response

BGIS Trading Ltd t/a Chris and Leon Buy Houses explained that their clients were offered a number of options to sell their property and for some, who were in negative equity, the most appropriate option might be a delayed sale model. In such cases, they offered a value equal to the mortgage redemption figure on the basis of exchange with a delayed completion spread over a number of years. This allowed the property value to recover to a position where their purchase of the property would be commercially viable, and in the meantime the mortgage payments, maintenance and costs of the property would be borne by Chris and Leon Buy Houses or one of their partners. The seller would receive a nominal initial payment, for example £1, and receive the agreed sale price at the end of the delayed completion period. They said that in some cases they were able to offer the seller greater than 100% of the current market value of their home.

Chris and Leon Buy Houses said they based the market value on Land Registry data on sold prices of comparable property nearby and conversations with local estate agents. Once a client had agreed to sell, they would then order an independent Royal Institute of Chartered Surveyors valuation of the property. They provided the ASA with evidence showing a house purchase under the scheme and a number of offers they had made to other clients.

Assessment

Upheld

The ASA understood that the meaning of the term "100% market value" was open to interpretation, and for that reason considered that marketers using the phrase should ensure they made clear in their ads how they would determine the market value of the property. We noted the “About Us” section on the web page stated that Chris and Leon Buy Houses based their initial offer on research into the local property market, but it was unclear what elements would be taken into consideration and how the research would be used to find the market value of a property. In the absence of further detail, we considered consumers were likely to expect that they could sell their property to Chris and Leon Buy Houses for an amount close to what they could achieve if they sold it through the open market.

We considered that consumers would understand the claims “we can pay up to 100% market value for your house!” and "Up to 100% of market value" to mean that they would be able to sell their property up to the market value and in the context of the claims “Need To Sell Your House Fast?”, “Sell Your House For Cash”, “... get your FREE CASH OFFER” and “Houses bought for cash”, that they would receive the payment quickly after the sale had been agreed. We also noted the Frequently Asked Questions section further down the web page stated “How Quickly Will I receive The Cash For My Property? Once you’ve contacted us the average time to actually receive cash for the property is three weeks. It can sometimes be faster and it can sometimes be slower ...”, which we considered also added to the impression that Chris and Leon Buy Houses were likely to purchase a property up to the market value for cash, which would be paid out quickly.

We also understood that although Chris and Leon Buy Houses would buy a property for cash, the offer on such purchases was less than what they considered to be the market value. That was offered only in cases of a delayed sale where there was an agreement to exchange contracts, but not to complete the sale for an agreed period of time and therefore clients would not receive payment for some years. We considered that the ad gave the impression that the claims “we can pay up to 100% market value for your house” and "Up to 100% of market value" applied to all house purchases, which was not the case, and therefore the claim gave a misleading impression of what was on offer.

In addition, although Chris and Leon Buy Houses provided evidence of one delayed sale agreement, they did not provide us with any evidence to show that the agreed price was based on their research into what the market value was likely to be for the property. We also saw no evidence to show that the offers to other clients, which appear to have mainly been made by a sister company called We Buy Any Gaff, reflected their calculation of what they believed was the market value of the properties.

Because the ad gave the impression that the claims applied to all house purchases, whereas they only applied to delayed sales, and we saw no evidence that the amount agreed in those circumstances was up to the market value of the property, as it would be understood by consumers based on the information in the ad, we concluded that the claims “we can pay up to 100% market value for your house” and "Up to 100% of market value" were misleading.

The ad breached CAP Code rules  3.1 3.1 Marketing communications must not materially mislead or be likely to do so.  and  3.3 3.3 Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means.
 (Misleading advertising) and  3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation.  (Substantiation).

Action

The ad must not appear again in its current form. We told BGIS Trading Ltd t/a Chris and Leon Buy Houses to ensure their advertising did not imply that they paid up to market value on all types of house purchases. We also told them to ensure that their advertising explained how they determined market value and to hold evidence to show that the price offered to clients reflected that calculation.

CAP Code (Edition 12)

3.1     3.3     3.7    


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