Are Purplebricks set to repay millions?

Laurel and hardy sad gif

Related posts Purplebricks – and the case of the regulators who won’t. Is my agent, local, an expert or even legal?! How do I check? Attempted intimidation by a PLC or fair comment? Purplebricks – What is really going on? Portal juggling – What is it, and why you should care

If you have paid hundreds or thousands of pounds up front to an agent (or been signed up to a loan agreement to defer payment – especially without your knowledge) and have little or nothing to show for it, this article is for you.

If you are an investor in Purplebricks (stock market ticker #PURP ) You may also be a regular visitor to my blog and may also wish to take a close look at the arguments I advance below.

Consumers in the UK are protected by a multitude of laws both civil and criminal. Various bodies are charged to police these and do so with varying degrees of success and ability. Sadly, for a variety of reasons, policing and enforcement often doesn’t happen until a consumer affairs programme, writer, show or journalist picks up the story and brings it to light, in doing, shaming the appropriate authority to act.

Since launching, thousands of home-owners and landlords have signed up and paid out many millions of pounds to Purplebricks PLC (PB) having made a “transactional decision*” to use their services. I.e. having considered the advertising, press statements, news statements and marketing information provided in the press, online by the company, Directors and CEOs’, as well as hundreds of ‘LPEs’ (allegedly ‘local property experts’).

However, a quick glance at PBs’ Twitter feed or Mumsnet on any given day, will show that the hype and claims often don’t match the advertised service.

There are any number of potential points where thousands of members of the public could reasonably make a case to have their upfront fees returned having been potentially misled, however, space and time don’t permit so, I will list what is, p[robably, one of the most contentious.

  • PB repeatedly claim that they sell more, more quickly and at better prices than other agents; most notably by their own Directors, CEO and lawyers

As an investor or a consumer, it is reasonable to believe that if the CEO or Director of a company makes a clear statement that they sell (complete on, not just sold subject to contract) 88% of all they list, then that is what they achieve.

I.e. consumers paying £1,100 on average, up front, can expect to complete on the sale of their home by a buyer introduced by Purplebricks in 88% of cases. Except that, with PB, this claim, seems, at best, rather ‘fluid’.

Michael Bruce, CEO stated it was 88%. Their solicitors stated it was in excess of 90% and Kenneth Bruce, Director said it was in excess of 80%. The current CEO stated to the BBC that they only sold 78% (and even that was subject to contract, not completed sales). Furthermore, independent analysts keep awkwardly placing the listing to sold figure well below that level too. Jefferies, for example, famously describing parting with £1,100 upfront to Purplebricks as “a coin toss”  My own data from 2014 – date just the West Cornwall area date also gives the lie to this figure** by a considerable margin.

Adapted from the Citizens Advice letter “Letter to claim damages for misrepresented goods or services” here


Roy Wilkinson and Sandy James
29 Lode Way
Manchester
MC1 2MA
Karl Keanes
1 Lode Way
Manchester
MC2 3MA

8 May 2018
Dear Purplebricks

Consumer Protection Act

I entered into an agreement with your company on INSERT DATE at a cost of £1,100 plus a further £300 for accompanied viewings which we were told we could defer at no additional cost or penalty.

At the time of purchase, it was indicated by a representative of your company, Michael Bruce, that the service/goods would include:

  1. An 88% chance of selling our home.
  2. That all Purplebricks reviews on Trustpilot were and are verified
  3. I was not signing up to a loan agreement.
  4. All I would normally expect from an estate agent which, I reasonably believed to mean you had high street offices.
  5. My ‘local property expert’ would accompany all viewings and not just a paid helper.
  6. I would save money compared to a high street estate agent
  7. I could use my own solicitors without additional cost
  8. That my LPEs held a nationally recognised RICS or NAEA NVQ level 3 or higher qualification in estate agency with many years of experience and thus reasonably qualified to be classed as a property expert

I have since discovered that none of the above is correct, I therefore feel that the advertising of your service and the contract itself was misrepresented to me. As such, I have no option but to cancel the contract without penalty in accordance with the Consumer Protection Act and request a refund in full by return.

I look forward to your response within 14 days so we can resolve this matter amicably. I also require being advised of my LPEs’ office address (as registered with TPO, HMRC/ FCA etc for redress and money laundering etc.) as I may also wish to take this matter up with The Property Ombudsman Scheme, The Competition and Markets Authority and The Financial Conduct Authority. Thank you.

Yours sincerely

Roy Wilkinson and Sandy James


List to sold 01.01.14 to 04.05.18

Supporting our investigations into questionable or misleading claims

If you would like to support my campaign to help inform and protect consumers and investors alike with well-researched information and data, please make a donation below. If you believe the information is worth more than the amount listed below, multiple donations are permitted. Thank you. Chris Wood

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*2.5 Apart from the banned practices (which are banned outright), these breaches have a threshold: the commercial practice will be unfair if it affects or is likely to affect the transactional decision making of the average consumer.7
 ‘Transactional decision’ is defined widely and is not simply a consumer’s decision to use your services or not, or to buy a property or not. It could, for example, be a client’s decision to accept an offer, or a buyer’s decision to enquire about a property, commission a survey or instruct a conveyancer. [para 3.4]
 The ‘average consumer’ is someone who is reasonably well-informed, and reasonably observant and circumspect. For example, an average consumer would pay some attention to documentation given to them, but not necessarily to the small print unless key points in it are brought to their attention. An average consumer would check out publicly available facts for themselves where this is straightforward to do, although what checks they actually make will be influenced by the information that you have given them. [para 3.4]
 The important question is whether your act or omission is likely to have an impact on the average consumer, not an actual consumer (who may be more or less well-informed, observant or circumspect than the average one).
Source: National Trading Standards guidance notes

**Copy of List to sold 01.01.14 to 04.05.18List to sold ratio of 33.3%. Listings to withdrawn for the same period 55%

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