The Office of Fair Trading (OFT) is cracking down on companies that offer quick house sales. Formal investigations have now been launched into three firms following allegations of unfair practices that may have led to customers missing out on tens of thousands of pounds. However, in a recent report, the body stressed that quick house sale companies can be beneficial to consumers who need a swift, easy sale.
When using a quick sale firm, consumers can achieve a sale faster than would be possible on the open market. However, this depends on the seller being willing to accept a price below market value. In most instances, between ten and 25 per cent of the value of a home is foregone.
OFT claims that in most instances, businesses deal with customers honestly and fairly. However, there are cases where firms use trading practices that prevent customers from making informed choices. In some cases, a consumer's financial situation is also exploited. Wrongful behaviours include reducing the price offered at the last minute so a seller is financially committed to a transaction, making misleading claims, stressing the fastest possible time for completion opposed to the average and encouraging sellers to sign long-term exclusivity agreements, with severe penalties for breaching the contract.
Complaints about quick sale companies largely come from vulnerable customers (70 per cent), whether due to finances or infirmity. These firms are also popular with those looking to get rid of inherited property or in the processes of moving abroad.
Gaucho Rasmussen, OFT director, said: "Responsible quick house sale firms offer a valuable service to consumers who want a fast sale. However we have also seen potentially illegal behaviour and as a result the OFT has opened investigations into three companies. When sellers get a bad deal, they could lose a lot of money. We want to ensure that consumers can have confidence in this sector and put an end to these shoddy practices."
Which? has welcomed the findings of the report, with a spokesperson claiming it is now time for the OFT to take "firm action" against companies that exploit customers and do not abide by the principles of fair trading.
- Friday 09 August 2013