Background
This Ruling forms part of a wider piece of work on unregulated investments, identified for investigation following intelligence gathered by the ASA.
Ad description
Two paid-for Google ads for The Pure Gold Company, a gold and silver retail dealer, seen in July 2024:
a. The first ad stated, “The Pure Gold Company… Invest in tax-free gold with competitive rates, buy-back guarantee and first-class service”.
b. The second ad stated, “Tax-Free Physical Gold. Invest in tax-free gold with competitive rates, buy-back guarantee and first-class service. As specialist brokers, we understand the market and your reasons for invest…”.
Issue
The ASA challenged whether the ads were misleading because they failed to illustrate the risks of the investments.
Response
The Pure Gold Group Ltd t/a The Pure Gold Company stated that their service differed from most of their competitors as they did not sell products directly from their website. The website acted as an educational tool. It also put consumers in touch with their brokers who provided expert guidance based on an individual’s circumstances and investment aims.
They said Google ads were limited in space and should be considered in the wider context of the landing page to which the ads linked. They confirmed that the landing page, and every page on their website stated, “Users should understand the market rate for gold / silver can go down as well as up”. They said that as a result of the complaint they had also added, “Past performance does not necessarily indicate future performance” to the website.They explained that the landing page now also included a boxed section where claims related to gold’s investment performance were immediately qualified with the text “** The value of gold like any investment is variable and can go down as well as up. Past performance does not necessarily indicate future performance.” They positioned the second warning near to the first reference on that page to the investment performance of gold, which they believed was the most suitable location because it was the first time consumers would think about investment outcomes. It was presented in clear language and font, and was asterisked to relevant text that mentioned how much gold had appreciated in the last ten years.
They also said that the landing page featured free guides about gold investment. Those guides, in conjunction with the professional guidance provided by their brokers, the fact you couldn’t buy directly from their website and the qualifying text meant that as a whole the ads made clear that investments were variable.
They said they were unaware of any other advertiser making statements relating to being unregulated for a physical product or that they were required to do so. They explained that consumers were aware of when a company was regulated by the Financial Conduct Authority (FCA) because those companies had to include those details on their website and in any documentation. In addition, consumers could search for the company on the FCA register. They said that while physical gold was not regulated, financial advice was, and they were very clear on their website that they did not offer financial advice. They were also clear on their website and when they spoke to clients that they were not regulated by the FCA.
They said further that consumers who had products with regulated firms did have access to the Financial Services Compensation Scheme (FSCS), which offered recompense when those authorised firms were unable to pay consumers. They explained that was not relevant to physical gold, because the customer took ownership of the physical product. Therefore, if their business failed it would make no difference to the value of the consumer’s holdings. They stated therefore that while they agreed material information should be presented clearly, for the reasons given they did not believe that their product being unregulated was material information.
Assessment
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 was material information that consumers required in order to make informed decisions about The Pure Gold Company’s services. In addition, the Code stated marketing communications for investments should make clear that the value of investments was variable and, unless guaranteed, could go down as well as up.
We noted that the ads contained no text stating that the investments were variable and could go down as well as up, or that gold investment was unregulated. We understood that the ads led to a landing page on The Pure Gold Company’s website that at the time had included text with information that gold prices could go down as well as up, but not that it was unregulated. However, the relevant text was at the bottom of the page and relatively small. It was not, therefore, immediately visible and consumers would have to scroll a long way to the bottom of the page to locate it. We acknowledged that the page had been updated to include a second warning, near a boxed section, that gold prices could go down as well as up, as well as the original text. While that was higher up than the original text – about halfway down the page – it was still not prominent and consumers had to scroll to reach it.
Because the ads did not include any risk warnings to make clear that the investments could go down as well as up, and that gold investment was an unregulated activity, and the landing page did not present that information immediately to consumers, we concluded that the ads were misleading.
The ads breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.9 (Qualification) and 14.4 (Financial products).
Action
The ad must not appear again in its current form. We told The Pure Gold Company Ltd t/a The Pure Gold Company 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.
