Ad description
Claims on www.hamptons.co.uk, on a property listing, stated, "£1,200 per Calendar Month + £216 incl VAT admin fee per property + other fees may apply". The text "+ £216 incl VAT admin fee per property + other fees may apply" was hyperlinked to a document which set out further details about related fees.
Issue
The complainant, who understood that it would not have been possible to rent the property without paying additional fees, challenged whether information about non-optional fees was sufficiently clear.
Response
Hamptons Estates Ltd said the administration fee was the only fixed charge. They pointed out that there was a statement on each property listing that stated "+ £216 incl VAT admin fee per property + other fees may apply", which was hyperlinked to a PDF document entitled "Charges and Information for Tenants". They said the document provided further details about other mandatory charges that might apply, including charges for obtaining references for the applicant. The document also stated "other charges may be incurred as part of the application process", which referred to check-in fees. They explained the check-in fee would vary from property to property, depending on the size, whether it was furnished or unfurnished and the charge levied by the independent inventory clerk, which reflected factors such as their travel time, of which Hamptons were paid a percentage. They said the fee was calculated by the inventory clerk in its entirety at a later stage in the transaction and so they could not state the exact cost in either the hyperlink or PDF document. They also explained that there was a reference fee of £54 per person or a fixed price of £120 for a company tenant. Given that they did not know whether a property would be rented by a company or not, or the number of tenants that would share a property, they could not state the exact charge within the hyperlink itself. They said there was a different fee structure for their Bristol branch. They applied an all-inclusive fee, combining the administration fee, referencing fee and check-in fee, which was the greatest of either 35% of the first months' rent or £420. They said they would amend the document, providing details of the check-in fees on the first page.
Assessment
Upheld
The ASA considered consumers would interpret the claim "+£216 incl VAT admin fee per property + other fees may apply" to mean that the administration fee was the only non-optional charge and, while there may be further charges, they did not apply to all or most customers. We understood, however, that with the exception of the Bristol branch, which charged one all-inclusive fee, there was a check-in charge which applied to all customers and was dependant on a number of factors. We noted that Hamptons allowed consumers to search for ‘unfurnished’ or ‘furnished’ properties, and would therefore have an understanding of the scale of the inventory upon check-in. They would also be aware of the size of a property, including the number of bedrooms, reception rooms, any outdoor space and so forth, prior to putting it on the market. However, we also understood that the fee was dependent on which third-party check-in clerk was available and their fee, which incorporated their travel time to the property in question, which would not necessarily be known when a property was marketed. In light of that, we considered that the check-in charge was a non-optional fee that could not be calculated in advance. CAP Code rule 3.19 3.19 If a tax, duty, fee or charge cannot be calculated in advance, for example, because it depends on the consumer's circumstances, the marketing communication must make clear that it is excluded from the advertised price and state how it is calculated. stated “If a … fee cannot be calculated in advance … the marketing communication must make clear that it is excluded from the advertised price and state how it is calculated”. We noted that there were no details about the additional fee, or how it was calculated, on the listing page or in the document that linked to the ad.
We also understood that, for branches other than Bristol, tenants would have to pay a referencing fee which was either £54 per person or £120 per property for a company tenant. Given that the fees were fixed, we considered that they were calculable in advance. CAP Code rule 3.18 3.18 Quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers. However, VAT-exclusive prices may be given if all those to whom the price claim is clearly addressed pay no VAT or can recover VAT. Such VAT-exclusive prices must be accompanied by a prominent statement of the amount or rate of VAT payable. stated “Quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers”. While we acknowledged that details of the charge were included in the document that linked to the listing, we considered that the ‘per person’ and ‘per company’ charges should have been stated alongside the quoted price.
Because the quoted price did not include all non-optional fees that could be calculated in advance, and the ad did not make clear that other non-optional fees, that could not be calculated in advance, applied or how they would be calculated, we concluded that the ad was misleading.
The ad breached CAP Code (Edition 12) 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),
3.17
3.17
Price statements must not mislead by omission, undue emphasis or distortion. They must relate to the product featured in the marketing communication.
3.18
3.18
Quoted prices must include non-optional taxes, duties, fees and charges that apply to all or most buyers. However, VAT-exclusive prices may be given if all those to whom the price claim is clearly addressed pay no VAT or can recover VAT. Such VAT-exclusive prices must be accompanied by a prominent statement of the amount or rate of VAT payable.
and
3.19
3.19
If a tax, duty, fee or charge cannot be calculated in advance, for example, because it depends on the consumer's circumstances, the marketing communication must make clear that it is excluded from the advertised price and state how it is calculated.
(Prices).
Action
The ad must not appear in its current form. We told Hamptons Estates Ltd to ensure quoted prices included non-optional charges that could be calculated in advance, and that their ads made clear if other non-optional charges, which could not be calculated in advance, applied and how they were calculated.
