Who: The Advertising Standards Authority (ASA), Aurum & Argenti Ltd t/a Bullion Club, Harrington & Byrne Ltd and Solomon Global Ltd t/a Buy Bullion
Where: United Kingdom
When: 20 November 2024
Law stated as at: 2 January 2025
What happened:
The ASA published a series of rulings that form part of its wider focus on unregulated investments. The ASA challenged whether the ads in question were misleading because they failed to illustrate the risk of the investments and did not make clear that past performance did not necessarily give a guide for the future.
Some of the ads challenged by the ASA are as follows:
- A paid-for ad for Bullion Club, a supplier of gold, which stated: “Gold Investments 2023 Gold Collectors Guide. Gold has historically held its value over time, making it a good hedge against inflation”. Bullion Club explained that its ad was limited by space and the relevant disclaimers were placed on a landing page that could be accessed via the ad.
- A press ad by Harrington & Byrne, a coin retailer, which advertised a “brand new 2024 UK Gold Sovereign”. The advertiser said that its ad had nothing to do with investment since a coin was offered as a piece for collectors. For this reason, it did not provide the information that it was challenged for by the ASA.
- A paid-for ad for Solomon Global, a supplier of gold and silver, which, among other things, stated “With Buy Bullion, you’ll gain the knowledge and guidance you need to make successful investments” and “Earn 10-12%. PA How to Invest in Gold. Download Your Free Guide.” Solomon Global explained that, based on legal advice, it understood that the sale of physical gold was not regulated by the Financial Conduct Authority (FCA) and ads for its product would not be considered a financial promotion. It was also advised that using “investment” in its ads did not classify them as financial promotions under the FCA rules. Solomon Global said that collectors bought physical gold as gifts and for investment, but these were not considered financial products that needed risk warnings. However, its website’s landing page included risk warnings about the volatility and value fluctuations of precious metals.
The ASA upheld all the challenges and concluded that the ads were misleading. In making its decisions, the ASA relied on the UK Code of Non-broadcast Advertising and Direct and Promotional Marketing (CAP Code) requirement that material information should not be omitted and should be presented clearly.
The ASA understood that the gold investment market was not regulated within the UK and was not subject to the protections afforded by the Financial Services Compensation Scheme or the Financial Ombudsman Service. The ASA considered this to be material information that consumers needed in order to make informed decisions about the advertised services. Furthermore, marketing communications for investments should make it clear that past performance or experience is not necessarily a guide for the future and that the value of investments is variable and, unless guaranteed, could go down as well as up.
All the ads in question either completely failed to include any risk warnings required by the CAP Code or did not present this information immediately to consumers.
In relation to Bullion Club’s ad, the ASA acknowledged that its website contained the relevant risk warnings. However since this information was at the bottom of the page at the time the ad was seen, the ASA did not consider it to be sufficiently prominent. Similarly, on Solomon Global’s ad, the ASA considered that the risk warning was not prominent enough as consumers had to scroll down to find it.
In relation to Harrington & Byrne’s ad, the ASA considered that the wording suggested it was presented as an investment. The claims – “due to the constant fluctuations in the market, which has seen gold hit record highs in recent months there is a real potential for sharp increases in price” and the coin “does not attract any Capital Gains Tax” – emphasised this impression.
In relation to Solomon Global’s ad, the ASA again stated that the wording suggested that it promoted gold as an investment not a gift or as a collector’s item.
Why this matters:
This rulings showcase the ASA’s focus on ads for unregulated investments. Businesses should bear in mind the CAP Code’s requirements when advertising unregulated investments, such as to make clear that the activity is unregulated, the value of an investment could go down as well as up and past performance is not necessarily a guide for the future. As the rulings demonstrate, this information must be prominently shown to consumers.
