Background
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Ad description
A radio ad, for a buy to let car company, included the voice-over “... you can appreciate just how many cars populate our roads. They’re costing us money yet making us nothing. But they could. In fact, if you fund a car through Buy2LetCars.com they’ll then lease it to a fully vetted customer and you could receive an 8 to 11% annual return”.
Issue
A listener challenged whether:
1. the claim “you could receive an 8 to 11% annual return was misleading and could be substantiated; and
2. the ad breached the Code because he believed it implied an unregulated product could have investment potential.
Response
1. Radiocentre said they were provided with details to support the claim, which they accepted.
2. Buy 2 Let Cars Ltd t/a Buy2LetCars.com said they believed the ad was acceptable but were prepared to ensure it appeared only on specialist financial channels in future. They said they had made certain changes to their product since the ad was broadcast.
Radiocentre said at the time of clearance they had considered the ad to be acceptable for non-specialist programming because they understood the product was not an investment, as a result of the arrangement with the advertiser and the way income was calculated. Consumers bought a car with Buy2LetCars.com, which was then leased out and the return was calculated according to a fixed formula. There was nothing ‘tradeable’, consumers were tied in for a fixed period and there was no market affecting the return. Radiocentre had also understood from the advertiser that the value of the purchase was fixed and therefore the arrangement was more akin to a savings account with a fixed rate of interest than an investment.
Assessment
1. Upheld
The ASA considered the evidence submitted, which took the form of examples of how returns were calculated and a sample lease agreement. However, we considered that information was not adequate to demonstrate that investors had achieved the returns claimed.
We considered the claim was likely to be understood to mean that investors could expect to receive returns of between 8% and 11% each year. However, we understood the claim related to the two different levels of investment available (one of which was associated with an average 8% annual return and one with 11% on average), which we understood were provided as 36 equal monthly payments, with an additional lump sum at the end of the three-year period involved. Although we noted it was intended that investors would receive a total of either 24% or 33% return over the three years, and that that was guaranteed, we were concerned that the ad did not make clear that the 8% or 11% returns were annual averages, with the rate for the first two years being lower than the percentages stated. We noted the ad also did not make clear the claim was intended to relate to returns of either 8% or 11%, with no possibility of achieving returns between those rates, or that the investment was for three years.
For the reasons given, we concluded that the claim was misleading and had not been substantiated.
On that point, the ad breached BCAP Code rules
3.1
3.1
Advertisements must not materially mislead or be likely to do so.
and
3.2
3.2
Advertisements must not mislead consumers by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that consumers need in context to make informed decisions about whether or how to buy a product or service. Whether the omission or presentation of material information is likely to mislead consumers depends on the context, the medium and, if the medium of the advertisement is constrained by time or space, the measures that the advertiser takes to make that information available to consumers by other means.
(Misleading advertising) and
3.9
3.9
Broadcasters must hold documentary evidence to prove claims that the audience is 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).
2. Upheld
We noted that Buy2LetCars.com’s product was not regulated under the Financial Services and Markets Act 2000 and that the ad had appeared on mainstream commercial radio. We noted it promoted a buy to let arrangement for cars, which we considered was likely to be understood by consumers as a type of investment and that claims such as that buy to let cars could make consumers money, and “... you could receive an 8 to 11% annual return”, further reinforced that impression. We therefore considered the ad promoted an investment and that because it was not regulated by FSMA, it should not have been broadcast on a non-specialist channel. We therefore concluded that the ad breached the Code.
On that point, the ad breached BCAP Code rule 14.5.4 14.5.4 advertisements for investments not regulated or permitted under FSMA. An advertisement that implies, for example, that a collectors' item or other unregulated product or service could have investment potential (in the colloquial sense) would normally be unacceptable. (Financial products, services and investments).
Action
The ad must not be broadcast again in its current form. We told Buy2LetCars.com to ensure they were in a position to substantiate their objective claims in future. We also told them to ensure their future broadcast advertising for investments not regulated or permitted under FSMA appeared on specialised financial channels, stations or programming only.
