The body issued formal notifications to the firms in January about advertising for SARB services; with the OFT asking the firms to substantiate claims made in their adverts or change them. Typical statements included that residents were able to live in properties for life after they had sold them, benefit from low rent or buy back their homes at any point.
Six firms agreed to taken down their websites following the OFT intervention, while three businesses have withdrawn from the SARB market altogether. Sell-quick.co.uk, Nationalpropertybuyers.co.uk, and Quickpurchase.co.uk have all agreed to amend their websites to comply with the OFT’s expectations.
Heather Clayton, senior director of consumer protection at the OFT, commented:
‘The unsubstantiated claims used by some sale-and-rent-back firms have been particularly concerning since they were targeting consumers suffering financial difficulties and at risk of losing their homes. We are pleased that these firms have agreed to change or remove their advertising.”
The OFT action follows the implementation of the FSA’s interim regime for the industry, in July. The regulator has warned that as of the beginning of this month, SARB firms without permission to operate in the market could face imprisonment and a substantial fine. The regulator’s rules follow the OFT’s original recommendation in 2008 that the sector should be regulated.
Peter Beaumont, chief executive of SARB firm Residential Property Solutions, said the OFT’s action was a further boost for the image of the sector.
He explained: “With regulation now coming in this is another good sign for the industry. Any firm not operating properly will fall off the horizon as a result of these changes.”
Beaumont said it had been monitoring a number of SARB websites and agreed that the OFT action was necessary.
“Many were not compliant and the implementation of regulation will clean up the sector. Those that fail to comply will cease to exist.”
