ASA Adjudication on Spreadex Ltd

Ad

A regional press ad, for a spread betting company, was headed "capital punishment?" The body copy stated "Looking to escape your spread betting firm? Want an account with tight spreads, fast executions and no re-quotes? How about FREE guaranteed stops, which means you will never lose more than is in your account? …”.

Issue

1. London Capital Group and CMC Markets challenged whether the ad, and in particular the logo with the text "capital punishment?" denigrated Capital Spreads, a competitor with a logo very similar to that used in the heading of the ad; and

2. CMC Markets challenged whether the ad was misleading, because it implied that Capital Spreads did not offer "tight spreads", "fast executions" and "no re-quotes".

CAP Code (Edition 11)

Response

Spreadex Ltd t/a ShortsandLongs.com (Spreadex) maintained that it was never their intention to cause offence to their competitors. They said, following correspondence with Capital Spreads regarding the issues raised in the complaint, they chose to pull the ad from publication.

1. Spreadex said the ad was intended purely as a light-hearted look at the spread betting industry and they had not sought to denigrate Capital Spreads.

2. Spreadex said they had no intention of misleading readers and maintained that the references to "tight spreads", "fast executions", "no-requotes" and "free guaranteed stops" were solely related to the service offered by ShortsandLongs.com. They said those were the key messages promoting the advantages of spread betting with ShortsandLongs.com, which had been used in several previous ads.

Assessment

1. Upheld

The ASA considered that, on the basis of information provided by Capital Spreads, the headline "Capital Punishment?" was incorporated into a graphic that very closely resembled Capital Spreads' logo. For instance, we noted the distinctive font used was the same and that the letter p in the word "Capital" linked to the word underneath.  We considered that readers were therefore likely to understand the graphic as a reference to Capital Spreads' service.  We considered that the claim "Capital Punishment" implied Capital Spreads service was punishing customers in some way and discredited their service.  We concluded that the ad denigrated Capital Spreads and therefore breached the Code.

On this point, the ad breached CAP Code clause 20.1 (Denigration and unfair advantage).

2. Upheld

We noted Spreadex's argument that the listed account features were only included in relation to their own service. However, we considered that, because of the close similarity between the headline graphic and Capital Spreads' logo, and the claim "looking to escape your spread betting firm", readers were likely to infer that a comparison was being made between Capital Spreads' service and Spreadex's Shortsandlongs.com and that the listed account features were not available to Capital Spreads account holders.  Because Spreadex had not shown that that was the case, we concluded that the ad was likely to mislead.

On this point, the ad breached CAP Code clauses 7.1 (Truthfulness) and 18.1 (Comparisons with Identified Competitors and/or their Products).

Action

The ad must not appear again in its current form.

Adjudication of the ASA Council (Non-broadcast)