|BBC blows the whistle on Foxtons|
Forgery, lies and deceit employed by estate agent
Foxtons, the Chiswick Business Park based estate agent, has been rocked by a BBC television programme which shows what has been described as a 'circle of deceit' at the firm. 'Whistleblower', which was broadcast last night, featured footage which was filmed with a hidden camera by two journalists who had taken jobs at their offices.
She spoke to several of Foxton’s ex-employees who all refused to be identified for fear of intimidation – an anxiety that she realised was all too justified after she was threatened with legal action by Foxton's lawyers who had writs delivered to her home in an attempt to intimidate her and her colleagues into not proceeding with the broadcast. One former employee spoke of a 'circle of deceit' at the firm in which vendors, buyers, tenants and landlords were routinely lied to.
Throughout the two months that Adams spent with the Foxton's sales team in their Notting Hill branch and the time her colleague Emma Clarke was at the St. John's Wood branch, the two women uncovered a whole host of underhand methods employed to maximise commissions.
Vendors reluctant to sell below the valuations given to them by Foxton's were given false offers to convince them to cut their selling price, mortgage valuers where given bogus documentation to ensure that they granted loans on over-valued properties and landlords' signatures were routinely forged in a process that was known as 'chop-chop.
The programme also showed a manager of one of Foxton’s branches providing an insight into the tactics used to persuade vendors to give commission Foxtons to sell their home. She said of their valuation tactics, "You've got to go higher. If I went in on my valuations and said what I genuinely thought it was worth you wouldn't get an instruction. 'Cause once you've got the instruction you've got control of it."
Allegations of Foxton’s over-valuing are not new. Other estate agents have been claiming for some time that Foxton's have a policy of deliberately over-valuing properties appealing to the greed of vendors who then sign a contract which ties them into Foxton's even if their service proves to be inferior. A staff trainer was quoted as saying, "We are associated with sharp sales tactics... People believe that we are going to try and sell them something for a lot more money that they want to spend... and funnily enough they are not wrong in that."
The root cause of the problems at the firm appeared to be the highly pressurised sales environment that the agents operate under. Sales meetings at which higher achieving agents are cheered and under performers humiliated occur on a regular basis. With basic salaries of just £10,000 the agents have to get commissions to make a living.
Anna Adams managed to get jobs at two estate agents with no professional qualifications and was handling sales having been given a limited amount of training. Speaking in the BBC documentary, she said, “Although I had some preconceptions about the profession, I was truly shocked by what I witnessed. My boss congratulates me on getting an offer on a flat that has been overvalued by £60,000. The newly-wed young couple viewing the property are stretched to their financial limit. But my manager is happy.”
“He takes me aside and explains how to convince a surveyor that the flat in London's fashionable Notting Hill is worth more than it is. He calls it 'slightly simmering' - I call it cooking the books. The scenario is not uncommon, in fact the manager himself boasts: "This kind of s*** happens all the time ... that's why we estate agents are here."
The programme also revealed how mortgage brokers Alexander Hall routinely shared information about buyers with Foxton's estate agents. This gave the agent inside knowledge as to how much the buyer was likely to be able to afford. Alexander Hall was presented to buyers as an independent company but it is owned by Jonathan Hunt who also owns Foxton's and their staff are based in Foxton's offices.
In response to the reports of the Whistleblower programme, Foxtons told the BBC, "Foxtons Limited and Alexander Hall Limited pride themselves on the professionalism and transparency of their respective businesses and has the utmost respect for the needs of its client and will always act in the client's best interest. Foxtons has in place a rigorous training process, during which its employees are told repeatedly of their statutory and contractual duties, and the high standards expected of them."
Reportedly most of the staff featured in the programme are still with the company.
Local Independent Financial Advisers, Berkeley Consultants, were asked to provide advice in the making of this programme. They were visited by a representative of the Whistleblower BBC production team on a consultation only basis, in order to comment on some of the documents that were being provided (within the course of the programme) to enable someone to get a mortgage. “We were very shocked at what we saw" commented Co Director Glen Morris, "we ensured that the BBC were advised on the correct procedures for customer identification which obviously contradicted with what they had previously seen."
"It also opens the debate about conflicts of interest when an estate agent’s in house financial services company can freely pass information on their customer to the agents sales department" commented Co Director Stephen Rodgers.
Although shocking, the misdemeanors of Foxton's employees were not the most serious featured in the programme. Estate agents employed by the Remax and Chard agencies were featured colluding to sell a deliberately undervalued flat to a developer in return for a cash payment.
This programme is bound to increase calls for more regulation and higher professional standards within the industry.
One would assume employees of Foxtons to be rather shamefaced this morning following the airing of last night’s BBC Whistleblower programme although the mood in the Chiswick office this morning appeared to be somewhat jovial. The Chiswick office was visited by Anna Adams during the course of the programme but no allegations were made against any of the staff based there.
March 24, 2006