Background
Summary of Council decision:
Three issues were investigated, all were Upheld.Ad description
Three websites for investment advisory service Stockmarket Insider, www.narendesigns.co.uk, www.stockmarket-insider.uk and www.stockmarket-insider.co.uk, seen in March 2019, featured two pages.
Text on the home page of each of the three websites stated “… of the thousands of ‘investment advisory services’ available, we can say we have held the #1 spot for performance at key intervals” and “We meet and often exceed, all required compliances as spelt out by regulators”. Each home page featured the testimonials of two customers including “Nicholas B”, which stated “I’ve been a subscriber to Stockmarket Insider for the last 4 years and two of my top performers came via their recommendation. I bought Align technology at $114 in April 2017 and recently cashed out my position at $264. Thanks, Stockmarket Insider! I find their reports a lot easier to digest than other share tip services and I love the fact that I am not obliged to do trade after trade”.
Text on the second page of each of the three websites stated “How are Stockmarket Insiders [sic] recommendations performing?” and “Britvic up more than 248%”, linking to text further down the page which stated “Stockmarket Insider first recommended shares of Britvic plc (LSE:BVIC) on 23 July 2012. As of the close of trading on 31/12/2018 the shares had gained 248.7%”.
Issue
The Motley Fool Ltd challenged whether the following claims were misleading and could be substantiated:
1. “of the thousands of ‘investment advisory services’ available, we can say we have held the #1 spot for performance at key intervals”; and
2. “Stockmarket Insider first recommended shares of Britvic plc (LSE:BVIC) on 23 July 2012. As of the close of trading on 31/12/2018 the shares had gained 248.7%” on the second page.
3. They also challenged whether the testimonials were genuine.Response
Stockmarket Insider Ltd did not respond to the ASA’s enquiries.Assessment
The ASA was concerned by Stockmarket Insider’s lack of response and apparent disregard for the Code, which was a breach of CAP code (Edition 12) rule 1.7 (unreasonable delay). We reminded them of their responsibility to provide a substantive response to our enquiries and told them to do so in the future.
1. Upheld
We noted the text above the claim “of the thousands of ‘investment advisory services’ available, we can say we have held the #1 spot for performance at key intervals” which stated “We launched in December 1993 and have consistently outperformed the marketplace since”. In that context, we considered that consumers would understand that Stockmarket Insider was the top performing investment advisory service during significant investment milestones since December 1993. Because Stockmarket Insider did not provide us with any evidence to demonstrate that they had outperformed other investment advisory services at key intervals during the abovementioned period, we concluded the claim had not been substantiated and was therefore misleading.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.7 (Substantiation).
2. Upheld
We considered that consumers would understand from the claim “Stockmarket Insider first recommended shares of Britvic plc (LSE:BVIC) on 23 July 2012. As of the close of trading on 31/12/2018 the shares had gained 248.7%” that Stockmarket Insider advised its customers to invest in shares of Britvic plc on 23 July 2012 and that those shares had since increased in value by 248.7% by 31 December 2018. We therefore expected Stockmarket Insider to hold evidence that they had recommended those shares to their investors on 23 July 2012 and that the value of those shares had increased by 248.7%. We had been provided with no evidence that Stockmarket Insider had recommended shares in Britvic plc on 23 July 2012 and while we understood that the value of shares in the company had increased over the period referred to, we had not been given any evidence that they had increased by the quoted rate of 248.7%. In light of that, we concluded that the claim had not been substantiated and was therefore misleading.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.7 (Substantiation).
3. Upheld
We considered that consumers would expect the testimonials featured on the website to be the genuine views of Stockmarket Insider customers. Stockmarket Insider had provided no evidence relating to the veracity of the testimonials. Because we had not seen evidence to demonstrate the testimonials were genuine, we concluded that the ad was misleading.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.45 (Endorsements and testimonials).Action
The ad must not appear again in its current form. We told Stockmarket Insider Ltd to ensure that they did not make claims about investment performance unless they held documentary evidence that substantiated those claims. We also told them to ensure that they held evidence that their testimonials were genuine.
We referred the matter to CAP’s Compliance team.
