The Advertising Standards Authority (ASA) has issued a ruling against an unregulated whiskey investment firm over misleading online adverts.

The firm, Whiskey & Wealth Club, is not regulated in the UK.

The ASA received two complaints about Facebook advertising from Whiskey & Wealth Club.

One complainant challenged whether the investment return claims made in the advertisement were misleading. Another complainant challenged the lack of information about the risk of the investments.

The ASA called the adverts misleading because they breached the ASA’s CAP Code (which is based on FCA promotion rules) because it did not make it clear that whiskey investment was unregulated and was misleading in relation to the potential returns offered. 

The standards body also noted that the 2%-5% service fees charged by Whiskey & Wealth club were not included within the claims of returns achieved and that someone who held casks for under a year would on average be unlikely to receive the advertised return.

The investigation by the ASA formed part of a wider piece of work on unregulated investments.

Under the CAP Code, promotional material for investments should make it clear that the value of investments are variable and, unless guaranteed, could go down as well as up. The Facebook adverts from Whiskey & Wealth Club contained no risk warning to make that clear.

Whiskey & Wealth Club acknowledged that the positioning and visibility of its investment warnings may not have been sufficiently clear but it believed the claim that, “Investors can expect an average of 9% -18% return per annum” was not misleading because it represented outcomes achieved by their customers.

The ASA ordered that the adverts must not be broadcast again in their current form.

The ASA is the body responsible for dealing with complaints about advertising content which it deems to be irresponsible or misleading. It has the power to order that an advert must not be broadcast or published again in its current format.