Background
Summary of Council decision:
Five issues were investigated, of which one was Not upheld and four were Upheld.
Ad description
A direct mailing consisting of a covering letter and an information pack promoted the betting tipster "Premier". Text in the covering letter stated "We have taken two extremely successful and proven money making methods, and combined them into one unique and powerful system ... The immediate future doesn't look too promising either - global credit crunch, further likely stock market corrections and the IMF warning that the world economy faces the biggest financial challenge since the great depression. Analysts suggest a very gloomy picture and indicate a period of serious financial uncertainty where tax rises and tough times are ahead. The good news is that the business we invest in is recession proof ...".
Text in the information pack stated "When you join the service we will give you a 7 day free trial. During the trial period, if you feel for any reason that the service is not for you, we will destroy/return your cheque as instructed by you, and destroy your application and standing order form ... Do subscribe if you are, like us, disciplined and capable of taking a long-term view and can see yourself with an annual tax-free income way in excess of £50,000 per annum in the years to come ... The following results show the performance attained over a fourteen week period". Below that text there was a table which showed that if a consumer had followed the tips advised by the service over a 14-week period, they could have achieved a profit of £3535 from an initial stake of £1000.
Issue
The complainant challenged whether:
1. the claim "we have taken two extremely successful and proven money making methods" was misleading and could be substantiated;
2. the references to "a global credit crunch", "IMF warning[s]", "the biggest financial challenge since the great depression", "a gloomy picture", and "a period of serious financial uncertainty" were irresponsible as they unduly played on consumers' fears of the economic recession to encourage them to take up the advertised service;
3. the description "free trial" was misleading, because he understood the advertisers were instead offering a money-back guarantee;
4. the earnings claim of "tax-free income way in excess of £50,000" was misleading and could be substantiated; and
5. the advertisers held substantiation to prove that the results shown in the table were genuine and had been proofed by an independent third party.
Response
1. Premier believed in the combination of betting on both horse-racing and football, and said their strategies were successful in the long term. They said if they had longer to respond they could request and provide copies of their betting accounts which would support the claim.
2. They argued that their comments regarding the global recession were reasonable. They said the facts relating to the world economy were there for all to see, and their point regarding the IMF warnings was completely correct. They believed their comments on the current gloomy economic picture were accurate and they included that information in the ad because many conventional investments were struggling, including those normally regarded as being low risk. Premier also highlighted that the claims should be considered in the context of the mailing as a whole, in which they clearly stated that their service also carried a risk. They said they had simply expressed their opinion that in current uncertain times, other methods of investment were not without risk, and there was no attempt on their part to worry people into joining the service. They believed that a reasonable person would be extremely unlikely to join the service purely on the basis of fear, and Premier would not want them to do so.
3. Premier stated that the "free trial" was a genuine offer and not a "money back guarantee". They explained that they offered a seven-day trial to all those who considered joining the service. They stressed that they took no payment before or during the trial, and those involved were under no obligation to make a payment, but were simply given the opportunity to experience the service and see if they wanted to subscribe.
4. Premier stated that it was possible to make a significant income from betting. Again, they said if they had longer to respond they could provide copies of their betting accounts which would support the claim.
5. Premier admitted that they had not proofed their results and said they would take steps to correct that. They said with more time, they could request copies of betting account statements which would show the results stated in the ad were genuine. They also said they could ask long-term clients to provide written testimony to that effect too.
Assessment
1. Upheld
The ASA noted the claim "we have taken two extremely successful and proven money making methods" and considered that most consumers would understand the claim to mean that members who used Premier's service had made a significant profit from the tips provided. We understood that Premier's method involved supplying tips for both horse-racing and football, and understood that the information pack included a section entitled "The Marriage of Football & Racing Betting", which claimed that the combination was effective as it meant the risk involved was limited. We noted that text stated "... by betting on football and racing, we take the view that should one aspect of the service go through a bad patch or losing period, the other aspect can often compensate", "on occasions both can have a poor period, but the strike rate we achieve ensures that this does not last too long and our staking ensures the betting bank is never compromised", and "The football naturally takes a break in the summer and this is precisely when the horseracing flat season is at its peak ... The marriage of both football and racing betting works so incredibly well". We understood, however, that Premier were not able to provide any evidence to demonstrate the success of their method, and therefore concluded that the claim was misleading and in breach of the Code.
The claim breached 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).
2. Upheld
We noted that the letter made several claims regarding the global economic crisis, including its impact upon individuals, such as the statement that currently the UK was experiencing "... a period of serious financial uncertainty where tax rises and tough times are ahead". We also noted that in the letter a number of other claims implied that the service Premier offered could be an easy solution to financial concerns, such as "An opportunity for you to make a substantial first or second tax-free income with very little effort", "The good news is that the business we invest in is recession proof and, in our opinion, much more lucrative than stock market investment. Moreover it has an estimated annual turnover of way in excess of 30 billion pounds and can produce profits that will astound you", and "The information we are about to reveal can make a real difference to your life ...". Although, we acknowledged that the information pack included text explaining that risks were involved and members would inevitably lose money on some bets, we noted the repeated high earnings claims and other claims such as "We can show you how to turn £500 into thousands of pounds", "We are able to offer you a service that can comfortably single out enough winning selections to make you a lot of money", and "A well-run dynamic service aimed solely at producing profits", and considered that the overall impression of the mailing was that the service offered a safe and easy way to earn a substantial amount of money, and could help those who were in financial difficulties. We therefore considered that in the context of a mailing which promoted a subscription tipster service, and involved substantial risk, claims emphasising the economic crisis, and the personal strains that many individuals were experiencing as a result, were irresponsible.
The claim breached CAP Code (Edition 12) rules 1.3 1.3 Marketing communications must be prepared with a sense of responsibility to consumers and to society. (Social responsibility), 16.1 16.1 Marketing communications for gambling must be socially responsible, with particular regard to the need to protect children, young persons and other vulnerable persons from being harmed or exploited. and 16.3.4 16.3.4 suggest that gambling can be a solution to financial concerns, an alternative to employment or a way to achieve financial security (Gambling).
3. Not upheld
We understood that upon receipt of the letter and information pack, if a consumer was interested in the service and wanted to join or trial it, they had to fill in an application form, a direct debit form, and send a cheque for £100 to Premier. We understood that they would then be given a seven-day "free trial" so they could try out the service first hand, and that Premier had asserted that they would not be charged until the trial was complete. We noted that information regarding the trial was set out in the information pack under the heading "No Strings "See if you like it" Trial", and stated "When you join the service we will give you a 7 day free trial. During the trial period, if you feel for any reason that the service is not for you, we will destroy/return your cheque as instructed by you, and destroy your application and standing order form ... this trial period will give you the opportunity to experience the service and get a feel for how it works knowing that, if you feel unhappy or uncomfortable, you can leave without any cost to yourself. We will not process your standing order or bank your cheque until seven days after you have received your membership pack and have had access to our service". We therefore considered that an individual could trial the service without any cost before deciding that they did not want to become a member. In addition, we considered that the text in the information pack clearly communicated to consumers their obligation if they didn't want to join the service after their trial, and explained that they would have to cancel their membership within seven days of receiving their membership pack to avoid being charged. We therefore considered that the references to a "free trial" were not misleading and were not in breach of the Code.
We investigated the claim under 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 3.26 3.26 Marketers must not use the term "free trial" to describe "satisfaction or your money back" offers or offers for which a non-refundable purchase is required. (Free), but did not find it in breach.
4. Upheld
We noted that the complainant had specifically challenged the earnings claim "annual tax-free income in excess of £50,000". We therefore expected Premier to provide evidence that a number of consumers using their service had earned over £50,000 in a year, and had not paid tax on their earnings. In the absence of evidence that showed members had achieved the stated earnings, we considered that the claim was misleading and in breach of the Code.
The claim breached 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).
5. Upheld
We understood that Premier had not proofed their results with an independent third party. We therefore considered that the results shown in the table had not been substantiated and were in breach of the Code.
The claim breached 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 claims must not appear again in their current form. We told Premier to ensure they did not make claims, and in particular earnings claims, in their advertising without robust evidence to substantiate them. In addition, we told them to not make irresponsible claims that unduly played on consumers' fears of financial pressures to encourage them to subscribe to their service, and to ensure they proofed their results with an independent third party.
CAP Code (Edition 12)
1.3 16.1 16.3.4 3.1 3.11 3.26 3.7
