Ad description
An email for Trendsignal, a financial markets trading education provider, dated 15 May 2018 included large text at the top of the email which stated “£3,198 profit in the first 2 weeks - Learn how to make consistent profits from trading”. Beneath, text stated “With the right strategy, you can make a huge income from trading”.
A testimonial from “Graham B. Trendsignal Trader” stated “Through a simple end-of-day strategy and employing the sensible risk-management I have been taught, I am currently almost 3,000 pips up after just 3 months of live trading- all for less than an hour a day of effort. Anyone who can follow a few well-defined rules with diligence and patience can do this”.
Issue
The complainant challenged whether the claim “learn how to make consistent profits from trading” was misleading and could be substantiated.
Response
Trendsignal Ltd said that the strategy they taught to customers consisted of training videos, online workshops, one-to-one coaching and a full day of training at their office; they provided a selection of training documents. They said the focus was to follow the rules of the strategy taught, they did not teach a ‘discretionary’ strategy which was based on one’s ability to read and interpret charts. They said that all clients received the same product, were able to look at the same indicators using the same strategies on the same charts, and through following the rules correctly, everyone could get the same results.
Trendsignal provided a table of their trading results showing the total points made annually from all the trades meeting the strategy’s rules, including all winning and losing trades, for the last five years. They also provided a graph that showed the same information. They said that those results showed consistent profits and the consistent nature of the strategy’s performance, which had been through rigorous testing and substantiation and was continually tracked.
Trendsignal said anyone who followed the rules should be able to match the results of the model but if people used the system differently, their results would be different. They said that as they were not a broker and customers did not place trades with them, they could not assess every single customer’s trades, instead they could provide testimonials which corroborated customers’ positive experiences. They also provided some results of their 2017 annual survey, which they said showed very high numbers of customers were still using, and would recommend, Trendsignal.
Assessment
Upheld
The ASA considered that consumers would be likely to infer from the claims “£3,198 profit in the first 2 weeks - Learn how to make consistent profits from trading”, “learn a new and powerful strategy that can accurately identify profitable turning points with a +66% success rate” and “Anyone who can follow a few well-defined rules with diligence and patience can do this” that they would definitely be able to achieve those results using Trendsignal’s strategy and, in so doing, would continuously make a profit.
We noted that Trendsignal believed that their annual trading results from the last five years showed a profit. However, we did not consider that this demonstrated that customers could achieve consistent profits when following the strategy’s rules in the future. While they provided positive customer survey results, again we did not consider that this was adequate evidence to substantiate the claims that simply following the strategy’s rules would deliver consistent profits.
In the absence of adequate evidence to show that customers would make consistent profits by using Trendsignal’s strategy, we concluded that the claims had not been substantiated and that the ad was misleading.
The ad breach CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising), 3.7 3.7 Before distributing or submitting a marketing communication for publication, marketers must hold documentary evidence to prove claims that consumers are likely to regard as objective and that are capable of objective substantiation. The ASA may regard claims as misleading in the absence of adequate substantiation. (Substantiation) and 3.11 3.11 Marketing communications must not mislead consumers by exaggerating the capability or performance of a product. (Exaggeration)
Action
The ad must not appear again in its current form. We told Trendsignal not to claim that their system could enable customers to make consistent profits unless they held robust substantiation.
