Background
This Ruling forms part of a wider piece of work on unregulated investments, identified for investigation following intelligence gathered by the ASA.
Summary of Council decision:
Two issues were investigated, both of which were Upheld.
Ad description
A paid for Google ad for Bullion Club, a supplier of gold, seen in June 2024 stated, “… Gold Investments 2023 Gold Collectors Guide. Gold has historically held its value over time, making it a good hedge against inflation. Gold …”.
Issue
The ASA challenged whether the ad was misleading because it:
- failed to illustrate the risk of the investments; and
- did not make clear that past performance did not necessarily give a guide for the future.
Response
1. Aurum & Argenti Ltd t/a Bullion Club said they understood the importance of informing potential investors that investments could vary. They explained that the ad was limited by space and led to a landing page that said, "The value of investments is variable and can go down as well as up" and “Aurum & Argenti is not regulated by the Financial Conduct Authority”. They said the information was prominently and clearly displayed on the landing page.
2. Bullion Club agreed the need to clarify that past performance did not give a guide to the future. They said that their website stated, "Past performance does not guarantee future performance" alongside investment examples. They said they were willing to make changes to the disclaimer and had amended the landing page to make the information more prominent.
Assessment
1. & 2. Upheld
The CAP Code required that material information should not be omitted and should be presented clearly. The ASA understood that the gold investment market was not regulated within the UK, nor was it subject to the protections afforded by the Financial Services Compensation Scheme or the Financial Ombudsman Service. We considered this to be material information that consumers required in order to make informed decisions about Bullion Club’s services. In addition, the Code stated marketing communications for investments should make clear that past performance or experience was not necessarily a guide for the future, and that the value of investments was variable and, unless guaranteed, could go down as well as up.
We noted that the ad contained no text stating that investments were variable and could go down as well as up or that gold investment was unregulated. We understood that the ad had led to a landing page on the Bullion Club’s website that had included text with information that the value of gold could fall and rise, and that they were not regulated by the Financial Conduct Authority. However, the relevant text was at the bottom of the page at the time the ad appeared. It therefore had not been immediately visible and consumers had to scroll a long way to the bottom of the page to locate it. While we understood from Bullion Club that a second similar explanation had been displayed more prominently on the landing page at the time the ad was originally seen, we had not seen evidence of that.
The ad further stated, “Gold has historically held its value over time, making it a good hedge against inflation”. Therefore, it referred to the previous performance of gold and we considered that by referencing inflation, implied it would continue to do well in the future. We noted that the ad also contained no warning or further information to explain that past performance was not a guide for the future. We again understood that the landing page for the ad had included text that stated, “past performance is not a guide to future performance”, but that was also located at the bottom of the page at the time the ad appeared and was therefore not sufficiently prominent.
We noted that changes had been made to the website. The risk warnings about gold being unregulated, that investments could go down as well as up and that past performance was not necessarily a guide for the future, were more prominent when viewing on a mobile device, although a consumer still had to scroll down on the desktop version. In any case, because at the time the ad was seen it did not include any risk warnings and the landing page had not presented that information immediately to consumers, we concluded that the ad was misleading.
On those points the ad breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.9 (Qualification) and 14.4 and 14.5 (Financial products).
Action
The ad must not appear again in its current form. We told Aurum & Argenti Ltd t/a Bullion Club to ensure that future marketing made sufficiently clear that gold investment was unregulated and that the value of investments was variable and could go down as well as up. We also told them to make clear that examples of past performance or experience were not necessarily a guide to the future.
