ASA Non-broadcast Adjudication: Inside Track Seminars Ltd

Complaint

Objections to a direct mailing for property investment seminars. Text stated "FREE! 'How You Can Give Up Work and be a Propery Millionaire Instead'. Start From Scratch - Live on Easy Street Instead of Struggling For a Living! Dear Friend, are you sick of the daily grind? Tired of working hard for little reward and sick of never having enough to make ends meet? At last there is a way out ... ... Isn't it your turn to get rich?". The mailing went on to describe how individuals who visited the advertisers' seminars and joined their scheme could build substantial property portfolios from a minimal outlay.

1. The complainants, one of whom was a financial advisor, challenged whether the mailing was misleading, because it implied that making money from the advertisers' property dealing scheme was guaranteed, and did not make clear the risks of dealing in the property market.

One of the complainants challenged whether:

2. the mailing, and in particular the claims "Do you think the purpose of life is to slave for forty-five years, pay off a mortgage on some pitiful little house and then huddle in front of a 1-bar electric fire, struggling to make ends meet? ... I don't know whether to laugh or cry at people's complete lack of financial savvy. They are heading for a lifetime of drudgery and lack, and a poverty-stricken miserable old-age" appealed unduly to recipients' fears and insecurities about poverty and old age;

3. the claim "How to retire completely debt-free in 3-5 years" was misleading and could be substantiated;

4. the earnings claims in the mailing were typical and could be substantiated;

5. the claim "Locate the best, most profitable transactions which are never advertised" was misleading and could be substantiated and

6. the claim "Get 'hands-on' assistance from top property professionals" was misleading, because he believed it implied that the advice would be given by independent advisors.

CAP Code

Adjudication

1. Complaints upheld

Inside Track Seminars (ITS) believed their mailing was not selling a product or service but was simply inviting recipients to a free introductory workshop where the benefits of understanding and managing risks would be highlighted; they considered it would be misleading and inappropriate to summarise a few top line risks in their promotional literature. ITS said, after participating in its workshop, people could become experts in risk management by paying a fee to sign up to their property educational programme.

The ASA noted ITS's comments. However, we were concerned that the mailing did not outline the potential risks of property investment because, while the workshop was free, recipients were not fully informed before making the decision to attend and could be inconvenienced through time or expense by doing so. We advised ITS to contact the CAP Copy Advice team for guidance on amending the wording of the mailing.

The mailing breached CAP Code clauses 2.2 (Responsibility) 6.1 (Honesty) and 7.1 (Truthfulness) on this point.

2. Complaint upheld

ITS agreed that the tone of the copy was emotive but considered it was an accurate and reasonable summary of the financial prospects facing many future UK pensioners. They said they would be happy to review the text if necessary.

We welcomed ITS's willingness to co-operate. While we acknowledged that old-age poverty was an issue of concern for many people, we considered that the text portrayed a situation facing a minority and the mailing did not make clear that investing in property was merely a potential means of securing a sound financial future. We advised ITS to contact the CAP Copy advice team for guidance in amending the tone of their mailing to make it less absolute.

The mailing breached CAP Code clauses 6.1 (Honesty), 7.1 (Truthfulness) and 9.1 (Fear and distress) on this point.

3. & 4. Complaint upheld

ITS submitted client testimonials and independent valuations of their clients' property portfolios to support their claims. They said all the testators had become clients in the last five years and several had built multi-million pound property portfolios.

We noted the testimonials were positive and the testators confirmed they had acquired robust property portfolios. However, we were not satisfied that participants in ITS's property educational programme were completely debt-free within three to five years or that the earnings claims in the mailing were typical. We considered that, while investors seemed to have acquired substantial equity through their property, that was not evidence that they were free of debt, although it could help them to alleviate it. Equally, while some investors could expect to earn large sums from property investment, we were not satisfied that ITS could guarantee such earnings for all its members, as implied by the testimonials. We concluded that the mailing exaggerated the ease of acquiring large amounts of ready cash from property investment and advised ITS to consult the CAP Copy Advice team for guidance to make the claims less absolute.

The mailing breached CAP Code clauses 3.1 (Substantiation), 6.1 (Honesty) and 7.1 (Truthfulness) on these points.

5. Complaint upheld

ITS said they were the UK's largest sourcer of residential property and that afforded them substantial buying power and allowed them to secure deals and discounts with developers for off-plan developments. They said those incentives were not usually available to the public or estate agents. ITS said they carried out detailed investigations on each development to ensure each property met the criteria 'best and most profitable property transactions'.

We noted that ITS members could learn of attractive offers as a result of the special relationship ITS had with developers. However, we were not satisfied from the evidence provided that ITS could guarantee that properties offered to their members would never be offered to the public or estate agents. We told them to remove the claim.

The mailing breached CAP Code clauses 3.1 (Substantiation) and 7.1 (Truthfulness) on this point.

6. Complaint not upheld

ITS said they employed staff who worked in specialist teams and had lengthy experience in all aspects of property development. They added that speakers at their education courses were usually independent, top property professionals.

The ASA did not consider that the reference to 'top property professionals' implied that they were independent of ITS. We concluded that it was clear from the mailing that the programme was operated by ITS and, because members were paying ITS for the service, any advice or assistance would be coming from ITS, not an independent source.

We investigated the mailing under CAP Code clauses 3.1 (Substantiation), 6.1 (Honesty) and 7.1 (Truthfulness) but did not find it in breach on this point.