UK advertising body advises on substantiation as complaints about misleading ads increase

The UK Advertising Standards Authority (ASA) has earlier today provided a piece of advice to firms about substantiating the claims in their ads. This happens as the latest data by the body has revealed a growing number of misleading ads. A number of such misleading ads have been published by entities related to online trading.

Around 70% of the complaints received by the ASA are about misleading advertising. In many cases, to establish whether a claim is misleading, the ASA will need to make an assessment of evidence. The requirement for evidence can arise in any number of scenarios, from how long a company has been trading, to their prices, to the validity of the efficacy claims they make for their products.

Regardless of the nature of the claim, the ASA notes that marketers need to bear several points in mind. For instance, Rule 3.7 requires that advertisers hold evidence for the claim before making it, so that they should be in a position to produce evidence, without delay, if asked by the ASA.

In addition to the need for the evidence to relate to the actual product being advertised, different types of claim will require different levels of evidence; one size does not fit all.

Finally, marketers will need to have evidence to support the claim as it is likely to be understood by the average consumer; having substantiation for the claim as an entity intended it to be understood won’t pass the test. Obvious exaggerations, claims that are unlikely to be taken literally and clear statements of opinion are unlikely to need substantiation. Difficulty can arise, however, when a claim which a marketer intended as puffery is actually one which the ASA considers is likely to be understood as objective.

In 2018, the ASA resolved 33,727 complaints, 72% of which concerned potentially misleading ads. As a result of action taken by the ASA, 10,850 ads were amended or withdrawn, up 53% from 2017.

There are three types of action the ASA can take as a result of an investigation.

No additional investigation : The ASA may decide there is no problem under the Advertising Codes and take no further action. In other cases, they are unable to investigate because the complaint or the advertising material falls outside of the ASA’s remit.

Informal investigation: Where appropriate, the ASA will resolve issues informally. For example, where a minor or clear-cut breach of the Advertising Codes has been made, the body may issue advice on how to comply with the Codes or seek assurance that an advertiser will change or withdraw their ad immediately.

Formal investigation: If the ad raises concerns under the Advertising Codes, the ASA can conduct a thorough investigation in which all sides are given the opportunity to comment. Advertisers will be asked to provide their arguments and evidence to support their advertising claims and approach.

Final rulings are made by the ASA Council, with complaints either upheld or not upheld. They are published in full on ASA’s website each week. In 2018, as FinanceFeeds has reported, there were a number of such ruling involving online trading companies or entities whose activities are related to online trading.

One example is ASA upholding a complaint about an ad by financial markets trading education provider Trendsignal. The ad in question was a part of an email for Trendsignal dated May 15, 2018. The email included large text at the top of it which stated “£3,198 profit in the first 2 weeks – Learn how to make consistent profits from trading”. Beneath, text stated “With the right strategy, you can make a huge income from trading”.

The ASA upheld the complaint, finding that consumers would be likely to infer from the claims in the ad that they would definitely be able to achieve those results using Trendsignal’s strategy and, in so doing, would continuously make a profit.

In a similar ruling last year, the ASA has upheld a complaint targeting a newspaper ad by Inside Access LLC t/a Crypto Bank Global, finding the ad was in breach of the CAP Code.

The ad in question appeared in the April 30, 2018 edition of a regional newspaper. Text in the ad stated “bitcoin to hit £30,000 in 2018! FREE CENTRAL LONDON SEMINAR … There are more millionaire’s being made from Bitcoin faster than anything in history. DON’T miss your chance AGAIN! Come to our FREE London Seminar and learn how you can make money in Bitcoin”.

The ASA believes that consumers are likely to understand from the claims in the ad that the value of the cryptocurrency would significantly increase in 2018 (potentially reaching 1 Bitcoin to £30,000) and any investment was guaranteed to result in swift and substantial profit.

Another example of ASA taking action against an ad by an online trading company refers to a ruling concerning a Facebook post for Axer Markets. The ad post stated “COMPETITION TIME! Like & Share our page for a chance to win a £100 Amazon voucher. Competition ends February 28th, the winner will be announced shortly afterwards!”.

The ASA upheld the complaint explaining that it had not received any information about how the promotion had been administered, nor evidence which showed that prizes had been awarded. In the absence of that, the body concluded that the promotion had not been administered fairly and was in breach of the Code. The ASA told Axer Markets to ensure that they awarded prizes as described in their marketing communications and that promotions were conducted under proper supervision.