The Advertising Standards Authority (ASA) has issued rulings against five unregulated precious metal investment firms today over misleading online adverts.
The ASA published the rulings as part of its investigation into social media and online adverts from unregulated investment firms.
Its rulings order that the adverts must not be broadcast or published again in their current format.
The investment firms running the ads are: Tarvos Ltd, Fortore Ltd, Sources Consultancy Ltd, Roseland Capital Ltd, and Montford Group Ltd.
A complaint against Tarvos Ltd (trading as 7879) was upheld after a paid-for Meta ad for the online retailer of gold and platinum jewellery failed to make clear that physical gold and precious metal investment was unregulated and that the value of investments was variable.
Fortore Ltd was issued a ruling over a paid-for Facebook advert for an investment competition website which failed to make clear that gold and precious metal investment was unregulated and the value of investments was variable.
Sourced Consultancy Ltd (trading as Oak & Mason) were also issued a ruling over a paid-for Meta ad for gold investment failed to make clear that physical gold investment was unregulated and the value of investments was variable. The ad also broke ASA rules by referencing an example of past performance that was unrepresentative.
A paid-for Facebook ad for gold and precious metals specialist Rosland Capital Ltd was ruled against by the ASA after it failed to make clear that gold and precious metal investment was unregulated and that the value of investments was variable.
The Montford Gorup Ltd (trading as Brittania Bullion) was also ruled against by the ASA after a paid-for Linkedin ad for gold investment failed to make clear that physical gold investment was unregulated and that the value of investments was variable.
The physical precious metals market is not regulated within the UK and is not subject to protections provided by the Financial Services Compensation Scheme or the Financial Ombudsman Service. The ASA requires firms to share this information with consumers within their advertising in order for them to be able to make informed decisions about a firm’s services.
The ASA ruling explained: “Section 14 of the CAP Code, which reflected rules prescribed by the Financial Conduct Authority (FCA) on promotional material for regulated investments, required that financial marketing communications not regulated by the FCA should make clear that the value of investments was variable and, unless guaranteed, could go down as well as up.
“Given the greater potential for significant financial harm resulting from financial marketing communications, those rules were additional to and more prescriptive than the rules on misleading advertising. That meant that relevant risk warnings prescribed by section 14 of the CAP Code needed to be in the initial ad and not later in the consumer journey, for instance on a landing page, or in the terms and conditions.
“We also noted that FCA guidance for regulated investments in social media stated that firms should ensure that where possible, information that was required to be prominent be displayed without needing to click through, or any other optional action, to view it.”
The adverts were identified for investigation following intelligence gathered by the ASA’s active advert monitoring system which uses AI to proactively search for online adverts that might break its rules.
The investigations by the ASA form part of a wider piece of work on unregulated investments.
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.