UK advertising body finds Stockmarket Insider made misleading claims
The Advertising Standards Authority (ASA) upholds complaints by The Motley Fool Ltd against Stockmarket Insider Ltd.
The UK Advertising Standards Authority (ASA) has found that an ad by investment advisory service Stockmarket Insider was misleading. The ruling concerns three websites for Stockmarket Insider: www.narendesigns.co.uk, www.stockmarket-insider.uk and www.stockmarket-insider.co.uk, which in March 2019, featured two pages.
Text on the home page of each of the three websites stated “… of the thousands of ‘investment advisory services’ available, we can say we have held the #1 spot for performance at key intervals” and “We meet and often exceed, all required compliances as spelt out by regulators”. Each home page featured the testimonials of two customers including “Nicholas B”, which stated “I’ve been a subscriber to Stockmarket Insider for the last 4 years and two of my top performers came via their recommendation. I bought Align technology at $114 in April 2017 and recently cashed out my position at $264. Thanks, Stockmarket Insider! I find their reports a lot easier to digest than other share tip services and I love the fact that I am not obliged to do trade after trade”.
Text on the second page of each of the three websites stated “How are Stockmarket Insiders [sic] recommendations performing?” and “Britvic up more than 248%”, linking to text further down the page which stated “Stockmarket Insider first recommended shares of Britvic plc (LSE:BVIC) on 23 July 2012. As of the close of trading on 31/12/2018 the shares had gained 248.7%”
The Motley Fool Ltd challenged whether the following claims were misleading and could be substantiated:
- 1. “of the thousands of ‘investment advisory services’ available, we can say we have held the #1 spot for performance at key intervals”; and
- 2. “Stockmarket Insider first recommended shares of Britvic plc (LSE:BVIC) on 23 July 2012. As of the close of trading on 31/12/2018 the shares had gained 248.7%” on the second page.
- 3. They also challenged whether the testimonials were genuine.
Stockmarket Insider Ltd did not respond to the ASA’s enquiries regarding the matter. The body upheld the complaints.
According to ASA, the ad would prompt consumers to understand that Stockmarket Insider was the top performing investment advisory service during significant investment milestones since December 1993. Because Stockmarket Insider did not provide the body with any evidence to demonstrate that they had outperformed other investment advisory services at key intervals during the abovementioned period, ASA concluded the claim had not been substantiated and was therefore misleading.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.7 (Substantiation).
Further, ASA had been provided with no evidence that Stockmarket Insider had recommended shares in Britvic plc on 23 July 2012 and while the body understood that the value of shares in the company had increased over the period referred to, ASA had not been given any evidence that they had increased by the quoted rate of 248.7%. In light of that, the body concluded that the claim had not been substantiated and was therefore misleading.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.7 (Substantiation).
Finally, ASA considered that consumers would expect the testimonials featured on the website to be the genuine views of Stockmarket Insider customers. Stockmarket Insider had provided no evidence relating to the veracity of the testimonials. Because the body had not seen evidence to demonstrate the testimonials were genuine, it concluded that the ad was misleading.
On that point, the ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.45 (Endorsements and testimonials).
ASA instructed Stockmarket Insider Ltd to ensure that they did not make claims about investment performance unless they held documentary evidence that substantiated those claims. The Authority also told Stockmarket Insider to ensure that they held evidence that their testimonials were genuine.
ASA referred the matter to CAP’s Compliance team.
