UK ASA finds Daisho System advertisement misleading for mixing trading and gambling
The Authority found the ads were giving consumers the false impression they were investing in the same way they would on the stock market when they were in fact wagering money on an online betting platform.
The difference between an online trading platform and an online betting one is probably clear to most of FinanceFeeds’ readers. And yet, to the general public this difference is vague. The UK Advertising Standards Authority (ASA) had to draw the line between gambling and trading in ruling in a case involving ads about a scheme named ‘Daisho System’ promoted by Waverley Media.
The case is about a direct mailing and a web document for a provider of ‘trading systems’, Waverley Media, seen on June 20, 2018, which promoted the ‘Daisho System’.
The direct mail featured text saying “THIS TIME YOU WON’T BELIEVE THE PRICE! Now the cleverest home trading strategy there is bar none, the one with the built-in fail safe that actually helps protect you from losing, that could enable you to retire on £9,000 to £12,000 a month is available for … A FRACTION OF THE ORIGINAL COST!!!”. Further text stated “… there’s even a 100% FREE bonus incentive of a standalone system which could enable you to make a minimum of £200 to £400 in 30 days or less and the potential to make the same every month thereafter”
The web document included text saying “Now the core methods of the hugely successful Daisho System, yes the one with the built in ‘failsafe’ that actually helps protect you from losing” and “… these days, because of the simplicity of using the internet, more and more people who in the past wouldn’t have bothered, are now using online betting exchanges where they don’t bet against a bookmaker, but instead gamble against each other … Now before I go on, let me make one thing absolutely clear … I HATE GAMBLING AND SO DOES TONY… And this system is certainly not about that. This is about trading SAFELY... knowing that if you invest say £100, you could easily get £130…£150…£180 back but your original investment is never at risk”.
The ASA received two complaints about the above-mentioned ads. Both complainants challenged whether the claim “that could enable you to retire on £9,000 to £12,000 a month” in the mail was misleading and could be substantiated.
Also, one of the complainants challenged whether the claim “which could enable you to make a minimum of £200 to £400 in 30 days or less and the potential to make the same every month thereafter” in the mail was misleading and could be substantiated.
Finally, one of the complainants, who believed that the Daisho System was related to gambling rather than trading, challenged whether the mail and the web document were misleading.
The ASA upheld all of the complaints.
The ASA considered that consumers would understand the claim “that could enable you to retire on £9,000 to £12,000 a month” to mean that the program was likely to be able to generate a monthly income of £9,000 to £12,000. Similarly, the Authority considered that consumers would understand from the claim “which could enable you to make a minimum of £200 to £400 in 30 days or less and the potential to make the same every month thereafter” to mean that the system was likely to be able to generate a minimum of £200 to £400 per month for its users.
Also, the Authority considered that consumers would understand from the claims “the cleverest home trading strategy” in ad (a) and “this is about trading SAFELY” in ad (b) that the Daisho system worked by buying and selling in an attempt to generate profit. That impression was furthered by Waverley Media’s comparison of the system, within their tutorials, to the stock market.
However, no shares were bought or sold, and value was not driven by the profitability of a company as was typically the case with trading on exchanges such as the stock market. As a result, the ASA considered that the ads were likely to give consumers the false impression they were investing in the same way they would on the stock market when they were in fact wagering money on an online betting platform in expectation that the losses made in wagering that money would be outweighed by winnings. The Authority considered, therefore, that the system followed methods that were distinct characteristics of gambling as opposed to trading.
The investigated ads were found to be misleading and to be breaking the CAP Code rules 3.1 (Misleading advertising) and 3.7 (Substantiation).
The ASA says the above-mentioned ads must not appear again in their current form. The Authority told Waverley Media Ltd to ensure their future advertising did not mislead by implying that sums of money were capable of being generated by using their products unless they held documentary evidence that this was the case. The ASA also told Waverley Media to ensure their future advertising did not misleadingly imply their products were related to trading as opposed to gambling when that was not the case.