The ASA has found that a TV ad for FxPro breaches social responsibility rules as it placed undue emphasis on the potential benefits of investing in a high-risk financial product and targeted young, student clientele.
Recently, FinanceFeeds has informed its readers of the negligible number of rulings by the UK Advertising Standards Authority (ASA) with regards to Forex advertising. The situation seems to be changing, as today, the ASA announced its ruling against a TV advertisement for FxPro UK.
The TV ad in question was seen on the Bloomberg TV channel on September 29, 2016. The ad began with a scene that featured a young adult who woke up and immediately grabbed a tablet device. The image on the tablet showed a falling EUR/GBP currency rate. The voice-over stated, “What can I say, I am a risk seeker. For me, trading is about being in the moment.” Then the actor arrived at what looked like a college where he checked the currency status. The image on the device indicated that the exchange rate had risen. The voice-over said “Surfing that wave for as long as it holds. And when the price changes direction, I go back in and profit on the way down. Some say it’s too risky. For me, it’s a thrill. Fortune favours the brave, right?” The actor then showed the currency rate to several other students.
There was an on-screen text message throughout the ad stating: “FxPro Trade Forex Like a Pro … Risk Warning: Trading CFDs involves significant risk of loss”.
The complainant claimed the ad was irresponsible because it was seen to encourage young adults to trade complex, high risk financial products throughout the day.
- Response by Media
Bloomberg Media responded on behalf of themselves and FxPro UK Ltd. They insisted Bloomberg TV is an established, specialist financial channel and, hence, the ad targeted a specialist audience.
Bloomberg also said that the warnings highlighted the risks associated with CFD trading and therefore the ad was presented in a socially responsible way.
Bloomberg Media had stopped broadcasting the ad while waiting for the ASA decision.
- ASA Ruling
The regulator upheld the complaint.
The ASA considered that the ad appealed to a younger, student audience that are likely to be inexperienced in trading CFDs. Moreover, the regulator considered the statements in the ad such as “What can I say, I am a risk seeker”, “I go back in and profit on the way down” and “Some say it’s too risky. For me, it’s a thrill. Fortune favours the brave, right?”. These, according to the ASA, created a strong impression that any risks associated with investing could be outweighed by the potential benefits, such as the thrill of investing.
The ASA concluded that regardless of any pre-vetting of potential clients the ad was irresponsible and that it breached BCAP Code rule 1.2 (Social responsibility).
The ASA ordered that the ad must not be broadcast again in its current form. FxPro UK Ltd has been told not to place undue emphasis on the benefits of investing in complex, high risk products in future.