Background
Three issues were investigated, two of which were Upheld and one was Not upheld.
Ad description
Instagram stories for WeShop, a community based shopping app:
a. The ad featured on Arianna Ajtar’s account and was seen in January 2023. It showed an image of Arianna Ajtar’s’s WeShop dashboard, including her total balance, number of shares, share price and how much it had increased. On screen text said, “starting off the year with 6 figures in my WeShop dashboard […] literally nothing to lose only everything to gain. Shares were 70p when I first joined in feb [sic], I started using it properly in around July time & shares have gone up basically 6x that! My WeShop referral code is arianna_ajtar and there’s more info about it all on my highlights.”
b. The ad featured on Mary Bedford’s account and was seen in September 2022. Mary Bedford said, “[…] I’ve spoken to you all about WeShop before a few months ago […] This by the way is not an ad. I am not getting paid to do this. I just genuinely want to tell you all. So basically WeShop is an app where you can buy, do your normal shopping. […] You get 20 percent back but in shares of the company. [...] I’ve been using for six months now and […] I have now got 12,000 pounds in shares in the company and then in 12 months I could […] sell my shares. […] There’s no catch to it. […] But last night we went out for dinner and they actually told me for today and tomorrow […] they are giving 50 percent back. […] And like I say this is not an ad. I am not getting paid to do it. […] So to get on to WeShop you do need a referral. So if you use my name Mary Bedford. […] I am not getting paid to tell you this. […] All go download WeShop and get 50 percent back of what you spend today and tomorrow.” A second slide continued with Mary Bedford who said, “[…] I joined the app when the share price was 30p […] well now the shares are £3.55 so everything times by seven. The share price is going to keep going up and up and up [...]”. The third slide had an image of Mary Bedford’s WeShop dashboard. It showed her total balance, number of shares, share price and how much it had increased. On screen text said, “So this is my @weshopsocial dashboard… as you can see the share price is currently £3.75 but that keeps on going up and up meaning your shares are worth more money [...] 50% shareback for 48hours only […]”.
c) The ad featured on Rebecca Lamb’s account and was seen in March 2023. It stated “Are you still using the WeShop app?” Further text said, “YES! I love @weshopsocial it’s bloody amazing. If you don’t do your online shopping via WeShop then you’re totally missing out. It costs you nothing more, you’re just getting shares for the things you’re buying and eventually you can withdraw the shares for money & when you do your first shop via WeShop you get 100% share back […] JOIN WESHOP HERE. Use my username “Rebeccaellenlamb” as your referral. That’s how much is in my account!!!!” An image of Rebecca Lamb’s WeShop dashboard showed her total balance, number of shares, that the share price was £5.95 and how much the balance had increased.
Issue
The ASA received three complaints:
1. All complainants, who understood that ads (a), (b) and (c) were paid for ads, challenged whether they were obviously identifiable as marketing communications and did not make clear their commercial intent;
2. One complainant challenged whether ad (b) was misleading, because it stated that any shares in WeShop would be guaranteed to increase in value; and
3. One complainant challenged whether the share price quoted in ad (c), £5.95, could be substantiated.
Response
1. WeShop said if someone saw Mary Bedford’s post and signed up to WeShop using her username, she would receive a percentage of their spend in shares. They said it was not exclusive to Ms Bedford and would be the same mechanism for every user. The only way anyone could access the platform was by using the username of another user.
They said that Arianna Ajtar’s post included the same mechanism as Mary Bedford and she would receive a percentage of the spend in shares, from anyone who signed up using her username.
Mary Bedford said that going forward any similar posts would be labelled to make it clear there was an affiliate relationship.
Arianna Ajtar said she was not paid directly by WeShop to promote their platform. She confirmed however that she did receive a percentage of the purchase price when customers bought anything on the platform via her username.
Rebecca Lamb said that all posts, including those with affiliate links, were always labelled to avoid being misleading. Ad (c) was a response to a question on a question box. She explained that she normally would include affiliate links on responses to a question, but in a scenario where she was being asked many questions, may have forgotten and answered the query with the link unmarked.
2. WeShop explained regarding ad (b) that neither themselves nor Mary Bedford offered marketing investments. The shares, which were received after 12 months of being locked in, were completely free of charge. Consumers did not buy them and they did not pay extra to buy items from other retailers through WeShop than if they bought them directly.
They agreed that when products were purchased as investments ads should be clear their value was variable. However, the shares were not an investment but a zero-priced gift. Therefore, a gift could not decrease in value when it had been given for free with no discount or value change in the retail products bought. Because the shares were gifted and the recipient did not have to exercise any choice in receiving them, they did not need a financial prospectus as per the Financial Services and Markets Act (FSMA). There was no offer of transferable securities to the public within the definition of FSMA.
They said because consumers made no decision to buy or subscribe to the shares, the shares were not classed as an investment.
3. WeShop stated that the share price was public on a platform which enables shareholders for private companies to liquidate shares, which was regulated by the Financial Conduct Authority (FCA).
Assessment
1. Upheld
Marketing communications must make clear their commercial intent, if that is not obvious from the context and must be obviously identifiable as such.
The ASA understood that Mary Bedford, Arianna Ajtar and Rebecca Lamb were participating in WeShop’s “Referring a Friend” scheme. By asking consumers to sign up to WeShop using their usernames, they would receive 1% in shares of any spend made by those who had signed up. All parties were therefore entering an agreement to promote WeShop’s service in exchange for payment via an affiliate programme. Those links were directly connected with the supply of goods provided by WeShop and were ads for the purposes of the Code.
Mary Bedford stated several times in ad (b) that she was not being paid for the content. Arianna Ajtar and Rebecca Lamb in ads (a) and (c) respectively, while mentioning a “referral code”, did not explain they would receive payment in exchange for someone signing up using their usernames. In all instances, the content was presented as the opinion of the speaker. The commercial nature of the affiliate content was not made clear prior to consumer engagement.
Because the ads were not obviously identifiable as marketing communications and the commercial intent of the marketer was unclear, we concluded that they breached the Code.
On that point the ads breached CAP Code (Edition 12) rules 2.1 and 2.3 (Recognition of marketing communications).
2. Upheld
We understood that WeShop was not a publicly listed company but their intent was to achieve an initial public offering or stock launch within twelve months of being founded. Therefore, consumers who obtained WeShop shares, despite the 12 month lock in period, would eventually be able to sell them through a stockbroker. The WeShop website had dedicated sections giving information about engaging a stockbroker and how to sell shares. While we recognised that the shares were free and the process of obtaining them meant the scheme was not regulated by the FCA, shares were nevertheless a financial product that reflected units of equity ownership of a company and were therefore an investment for the purposes of the Code.
Further to that, while the shares were free, they could only be obtained by purchasing products through the WeShop platform. The ad encouraged consumers to make purchases via WeShop as an inducement to obtaining shares, and we considered that would be likely to affect a consumer’s decision to use WeShop in preference to other outlets or to make additional purchases above and beyond what they would otherwise have made in the expectation of obtaining more shares in the company.
The CAP Code stated that ads must make clear that the value of investments were variable and, unless guaranteed, could go down as well as up. In addition, ads should make clear that past performance or experience did not necessarily give a guide for the future; if they were used in marketing communications, examples of past performance or experience should not be unrepresentative.
Mary Bedford stated in ad (b) that, “I joined the app when the share price was 30p […] well now the shares are £3.55 so everything times by seven. The share price is going to keep going up and up and up” and “[…] as you can see the share price is currently £3.75 but that keeps on going up and up meaning your shares are worth more money […]”. Therefore, Ms Bedford used historical examples of past performance but at no point was it made clear that this was not necessarily a guide to the future. In addition, there was no warning or disclaimer that the value of investments was variable and could go down as well as up.
Because the ad did not include any risk warning making consumers aware that the value of shares could go down as well as up and did not make clear that past performance or experience did not necessarily give a guide for the future, we concluded that the ad was misleading.
On that point ad (b) breached CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising), 3.9 (Qualification) and 14.4 and 14.5 (Financial products).
3. Not Upheld
The CAP Code stated, 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.
Ad (c) stated that the share price on Rebecca Lamb’s account was £5.95. WeShop was not a publicly listed company. Therefore, the share price was not determined by the market and was not widely available. However, WeShop shares could be purchased on a platform that matched investors and shareholders and facilitated transactions, and that company was FCA registered. The share price on that platform matched the share price in the ad.
We therefore concluded that the claim had been substantiated and was unlikely to mislead.
On that point, we investigated the ad under CAP Code (Edition 12) rules 3.1 (Misleadingness) and 3.7 (Substantiation) but did not find it in breach.
Action
The ads must not appear again in the form complained about. We told WeShop Holdings Ltd to ensure that future marketing communications were obviously identifiable as such, and made clear their commercial intent. They must ensure that their future ads made sufficiently clear 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.
