ASA Adjudication on Stanley Gibbons Ltd

Ad

A magazine ad, for Stanley Gibbons, was headed "Guaranteed returns of between 4 and 6% p.a* with an unlimited upside *terms and conditions apply". Below that the ad showed an image of a stamp and text stated "how it can work for you: 1997 £30,000 2007 £85,000 A return of 183% in 10 years".

Issue

Mr Philip J Milton of Philip J Milton & Company plc, independent financial advisers, challenged whether the ad was misleading because:

1. the prices were based on Stanley Gibbons own catalogue prices, which he believed were not equivalent to real values at auction, and

2. the price increase quoted gave a misleading impression of the typical returns that could be gained from an investment.

CAP Code (Edition 11)

Response

1. Stanley Gibbons said the ad did not state that the quoted prices were based on auction values.  They said the depicted stamp was so scarce that it was rarely sold at auction.  They confirmed the price was their own catalogue price.  They said the Stanley Gibbons catalogue was published on an annual basis and was acknowledged throughout the industry as a reference for accurate pricing, taking into account all sales channels, including auctions, where applicable.  

2. Stanley Gibbons said the quoted price increase was a specific example of the returns for a specific stamp and that was detailed in the ad with an illustration of the relevant stamp, its Stanley Gibbons catalogue number and the correct prices.  They said the ad did not state that that example was a typical return.  They said the only return they could guarantee was between 4% and 6%, which was guaranteed under a written contract.

Assessment

1. Upheld

The ASA understood that Stanley Gibbons offered rare, high value stamps as an investment opportunity.  We noted the ad referred to the returns gained on buying the stamp and offered further information in the form of an investment guide.  We noted Stanley Gibbons produced a comprehensive list of prices for rare stamps in the UK and that the prices quoted in the ad were based on those figures.  However, we considered that such prices were unlikely to be as accurate as the market value established at auction.  We considered that readers were likely to expect that returns were based on an objective measure rather than the advertisers own estimate. Because Stanley Gibbons could not demonstrate that the quoted prices actually related to stamps that had been sold at auction, we concluded that the claims were likely to mislead.

On this point, the ad breached CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness).

2. Upheld

We noted the ad quoted percentage returns of between 4% and 6%, which were guaranteed by a contractual arrangement entered into between Stanley Gibbons and the buyer of a particular stamp.  We understood that a previous ASA Adjudication had found that that claim was acceptable. We noted, however, the example price quoted in the current ad indicated significantly greater returns than the guaranteed 4-6%. We noted the price information in the Stanley Gibbons catalogue included several stamps that had appreciated more than the one featured in the ad and several that had not.  However, because those prices were based on estimates and not actual market prices, we considered that any expectation of a return beyond the quoted 4 to 6% could not be substantiated. We concluded that the ad was likely to mislead.

On this point, the ad breached CAP Code clauses 3.1 (Substantiation), 7.1 (Truthfulness) and 53.5 (Financial products).

Action

The ad must not appear in its current form.  We advised Stanley Gibbons to consult CAP Copy Advice.

Adjudication of the ASA Council (Non-broadcast)