Summary of Council decision:
Three issues were investigated, all of which were Upheld.
A direct mailing and a web document for a provider of 'trading systems', Waverley Media, seen on 20 June 2018, promoted a scheme named 'Daisho System':
a. The direct mail featured text which stated "THIS TIME YOU WON'T BELIEVE THE PRICE! Now the cleverest home trading strategy there is bar none, the one with the built-in fail safe that actually helps protect you from losing, that could enable you to retire on £9,000 to £12,000 a month is available for ... A FRACTION OF THE ORIGINAL COST!!!". Further text stated "... there's even a 100% FREE bonus incentive of a standalone system which could enable you to make a minimum of £200 to £400 in 30 days or less and the potential to make the same every month thereafter ... go ahead and take a look for yourself!"
b. The web document featured text which stated "Now the core methods of the hugely successful Daisho System, yes the one with the built in 'failsafe' that actually helps protect you from losing" and "... these days, because of the simplicity of using the internet, more and more people who in the past wouldn't have bothered, are now using online betting exchanges where they don't bet against a bookmaker, but instead gamble against each other ... Now before I go on, let me make one thing absolutely clear ... I HATE GAMBLING AND SO DOES TONY... And this system is certainly not about that. This is about trading SAFELY... knowing that if you invest say £100, you could easily get £130...£150...£180 back but your original investment is never at risk".
The ASA received two complaints:
1. Both complainants challenged whether the claim "that could enable you to retire on £9,000 to £12,000 a month" in ad (a) was misleading and could be substantiated.
2. One complainant challenged whether the claim "which could enable you to make a minimum of £200 to £400 in 30 days or less and the potential to make the same every month thereafter" in ad (a) was misleading and could be substantiated.
3. One complainant, who believed that the Daisho System was related to gambling rather than trading, challenged whether ads (a) and (b) were misleading.
1. & 2. Waverley Media Ltd said that the offer detailed in ads (a) and (b) had ended and that they had no plans to sell the Daisho system in future. They said that neither ad claimed any particular person would make the amounts stated but rather that those amounts could be made so long as users took the appropriate actions.
Waverley Media said the amounts claimed were based on results obtained during extensive testing of the system by its author over a 20-month period, during which a total of 559 ‘trades’ were made. They provided a spreadsheet of those trades which they stated demonstrated the quoted profits could be made. They said those profits were hypothetical examples based on actual results obtained using real money and that ad (a) stated “All figures quoted are our own experience based on research and development only. You may do better or worse”.
Waverley Media provided screenshots of the author’s online betting exchange account and bank account showing profits made between 2015 and 2018. One example of those profits showed a figure of £8,107.00, which they stated was a result of trades over a period of 11 days in March 2016. They also provided testimonials from three users of the system, stating that they had made average sums of between £2,000 and £9,000 a month from trading.
3. Waverley Media said the Daisho system was a football trading system. They provided manuals and tutorials for the system, which detailed different methods by which profit could be made. They said that customers were given selection criteria for trades so that they could find their own selections and were taught all the information required to execute them. They said that users had to place bets on football matches and also had to be available during matches to live-trade and to follow various steps depending on what happened during those matches.
They provided an online article entitled “What’s The Difference Between Betting & Trading”, which said that the trading process usually involved placing two bets on the same event at different times in order to profit regardless of the outcome. It said that trading could reduce the risk of wagering on sporting events, that trading was not risk free but once the process had been learnt, steady profits could be made.
1. & 2. Upheld
The ASA considered that consumers would understand the claim “that could enable you to retire on £9,000 to £12,000 a month” to mean that the programme was likely to be able to generate a monthly income of £9,000 to £12,000. Similarly, we considered that consumers would understand from the claim “which could enable you to make a minimum of £200 to £400 in 30 days or less and the potential to make the same every month thereafter” to mean that the system was likely to be able to generate a minimum of £200 to £400 per month for its users.
We acknowledged Waverley Media’s comments that the figures expressed were sums of money that could potentially be made as opposed to a guarantee that they would be and that the text in ad (a) stated “you may do better or worse”. However, we did not consider that to override the overall impression created by the ads that those profits quoted were likely to be generated.
We understood from the information provided by Waverley Media that the Daisho system required customers to open an online betting exchange account and that the exchange platform providers were not affiliated with the system or with Waverley Media. The information provided showed that the author of the system had made both profits and losses, but that the profits outweighed the losses. Whilst we acknowledged this, we did not consider it was sufficient indemonstrating that those profits were made using the system itself, and we had not seen any evidence from the online betting exchange of winnings made from specific events.
We also understood that there were significant risks, particularly with users expected to be available throughout live events and to use the “cash out” facility at certain moments within those events depending on what was unfolding, which meant there was a distinct possibility that users would not generate those profits. In addition, the testimonials provided did not demonstrate that those figures had been obtained through using the system, and only one of those testimonials stated that they were able to generate £9,000 a month.
Therefore, because it had not been demonstrated that users were likely to generate a monthly income of £9,000 to £12,000 or make a minimum of £200 to £400 per month from the Daisho system, we considered the claims had not been substantiated and were likely to mislead.
On those points, we investigated ads (a) and (b) under CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising) and 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).
We considered that consumers would understand from the claims “the cleverest home trading strategy” in ad (a) and “this is about trading SAFELY” in ad (b) that the Daisho system worked by buying and selling in an attempt to generate profit. That impression was furthered by Waverley Media’s comparison of the system, within their tutorials, to the stock market.
We understood that a number of methods were used in order to generate profit, through placing bets on the online betting exchange platform against other customers as opposed to the bookmaker. Those methods included placing ‘back’ and ‘lay’ bets on events, such as football matches, which meant that bets were placed both on and against a certain outcome.
Their methods in a bid to secure profit required customers to place more than one type of bet on a certain event, such as the number of goals scored and the end result of a football match. That meant some bets were lost and some were won on the same event, and customers were required to wager money on bets that offered certain odds, meaning that the margins were short enough to allow their winnings to outweigh their losses, regardless of the results.
No shares were bought or sold, and value was not driven by the profitability of a company as was typically the case with trading on exchanges such as the stock market. Consequently, we considered that the ads were likely to give consumers the false impression they were investing in the same way they would on the stock market when they were in fact wagering money on an online betting platform in expectation that the losses made in wagering that money would be outweighed by winnings. We considered, therefore, that the system followed methods that were distinct characteristics of gambling as opposed to trading.
Therefore, because we considered that the Daisho system was related to gambling rather than trading, we considered that ads (a) and (b) were misleading.
On that point, we investigated ads (a) and (b) under CAP Code (Edition 12) rules 3.1 3.1 Marketing communications must not materially mislead or be likely to do so. (Misleading advertising) and 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).
Ads (a) and (b) must not appear again in their current form. We told Waverley Media Ltd to ensure their future advertising did not mislead by implying that sums of money were capable of being generated by using their products unless they held documentary evidence that this was the case. We also told them to ensure their future advertising did not misleadingly imply their products were related to trading as opposed to gambling when that was not the case.