Purplebricks' shares plunge after BBC investigation

Online estate agents Purplebricks has apologised after a BBC investigation exposed breaches of a ban on certain advertising claims, leading to the site's share price to plunge.

BBC1's Watchdog consumer programme revealed a standard email sent to prospective customers claimed using Purplebricks could save them an average of £4,158 pounds compared to a traditional estate agent.

The figure is one of six banned by the Advertising Standards Agency (ASA) from the company's advertising last year over concerns it "could prove misleading", says the Daily Telegraph.

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Purplebricks co-founder Michael Bruce told the BBC the claims had been removed "within one hour" of Watchdog being broadcast, says Estate Agent Today.

He added that the "ASA had only found that the agency could not substantiate that saving in every case and it did not deny that savings - implicitly of smaller amounts - were not possible".

Purplebricks also faced separate claims on BBC Radio 4's You and Yours programme over its "deferred payment service" following complaints by customers that they had not been aware they were entering into a credit agreement with a third party.

"If this happens, it contravenes consumer protection legislation," says Estate Agent Today.

Bruce hit back at the criticism and said the scheme and its terms and conditions had been approved by both the Property Ombudsman and Trading Standards. In addition, he said, only 0.2 per cent of customers had complained.

He added, however, that the firm would hold talks about a "more transparent arrangement" with its partner Close Brothers.

At one point yesterday, Purplebricks' shares were down seven per cent. It trimmed those losses by the end of the day and at time of writing, was up around three per cent on the day for Thursday.