Summary of Council decision:
Three issues were investigated, all of which were Upheld.
a. A post on the Work From Home UK Facebook page, posted on 15 May 2022, had text that stated, “Sign up Sunday. Free to join. Training provided. Team support. Pockets of time to suit you. £1200 in bonuses in your first 3 months. Instant and Monthly commission. Amazing friendships. Must be 16+. FM World.” The text appeared alongside an image with further text that stated, “SAYYYYYYY Whhaaattt FREE BUSINESS SIGN UP”.
b. A post on the Work From Home UK Facebook page, posted on 15 May 2022, had text that stated, “Work around your current commitments. Perfect for stay at home mums and dads, nans, grandads, students or do to [sic] in your spare time. *IMMEDIATE START* Part time or Full Time. No experience required. Very flexible, work around your family, studies, job etc when you want. Must be over 16. NO UPFRONT COST”. The text appeared alongside an image with text that stated, “Benefits of joining my team. No cost to join. No targets. Training & Support. FREE holidays. £1,200 fast track bonus. 30% instant commission from day 1. Car plan. No stock needed at home. No contract. No leaving fee. Work as much or little as you want. Work from anywhere. No compulsory starter kit. No minimum orders. Shall I go on?”
c. A post on the Work From Home UK Facebook page, posted on 13 May 2022, had text that stated, “FM REPS WANTED. FREE TO JOIN. Work around your current commitments. Perfect for stay at home mums, dads, students or you in [sic] your spare time. *IMMEDIATE START* Free to join. No starter kit needed to buy. 30%-100% instant cash profit. Access to £££ Fast start bonus. Access to a car programme. Success Trips. Monthly incentives. Over 30k in bonuses. Full or part time. No experience required. Endless amount of support. Very flexible, work around your family, studies, job etc when you want.” The text appeared alongside an image of beauty products and bottles of perfume on a mat. The mat had text that stated, “FM GET PAID TO SMELL GREAT! ASK ME HOW!”
The ASA challenged whether the claims in:
1. ads (a) and (b) that an applicant could achieve £1200 in bonuses could be substantiated;
2. ad (c) that an applicant could achieve over £30,000 in bonuses could be substantiated; and
3. ad (b) that an applicant would achieve “30% instant commission” and in ad (c) “30%-100% instant cash profit” could be substantiated.
FM Cosmetics Distribution UK.Ltd (FM Cosmetics) said that the ads were created by associates without agreement or authorisation.
They explained that the UK branch of FM Cosmetics was part of FM World Group which conducted business throughout Europe. The core business was distribution of cosmetics and some services supporting trading in those goods. In the UK, FM Cosmetics had been active since April 2007 and operated with an experienced business partner acting as a distributor (franchisee). That was unexpectedly terminated in March 2022. FM Cosmetics then had only a few months to rebuild its networks of partners, contacts, distribution and logistics and had to make new partners, including sales and distribution associates.
They said that any infringement of their own policies and the CAP Code found in the ads was a result of the short-term cooperation with the associates and was an accidental act. They explained that they had restrictive marketing and sales policies that prohibited any misleading marketing. As such they have taken the necessary action and implemented mandatory additional training around avoiding misleading marketing and sales practices.
They apologised for the situation and confirmed every effort would be taken to prevent similar ads appearing.
1., 2. & 3. Upheld
The ASA noted FM Cosmetics’ comments that third-party associates had made claims without the appropriate authorisation, but we were minded that the primary responsibility for observing the CAP Code remained with FM Cosmetics. We acknowledged, however, their assurance that similar ads would not appear in the future.
The CAP Code stated that 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. In addition, marketers for homeworking schemes may state the likely level of earnings only if it can be supported with evidence of the experience of existing homeworkers. Because we had not seen evidence that an applicant could achieve £1200 or £30,000 in bonuses, 30% instant commission and 30-100% instant cash profit, the claims breached the Code and the ads were likely to mislead.
The ads breached CAP Code (Edition 12) rules
Marketing communications must not materially mislead or be likely to do so.
Marketing communications must not mislead the consumer 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 the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means. (Misleadingness), 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 20.4 20.4 Marketing communications for homework schemes must contain no forecast of earnings if the scheme is new. Marketers may state the likely level of earnings only if it can be supported with evidence of the experience of existing homeworkers. Marketers must not exaggerate the support available to homeworkers. (Homeworking schemes).
The ads must not appear again in their current form. We told FM Cosmetics Distribution UK Ltd and their third-party associates that their advertising must not make claims without supporting evidence and that the likely level of earnings claims could only be made if they were supported with evidence of the experience of existing homeworkers.