A UK consumer watchdog is warning investors to watch out for companies making misleading claims about share tip services online.
The warning follows an investigation into a firm trading as Stockmarket Insider.
The Advertising Standards Authority (ASA) picked up three complaints from rival investment web site and magazine The Motley Fool.
The complaints alleged three web sites operated by Stockmarket Insider showed unsubstantiated claims –
- “of the thousands of ‘investment advisory services’ available, we can say we have held the #1 spot for performance at key intervals”
- “Stockmarket Insider first recommended shares of Britvic plc (LSE:BVIC) on 23 July 2012. As of the close of trading on 31/12/2018 the shares had gained 248.7%”
- Online testimonials were also questioned as genuine
Stockmarket Insider did not respond to the ASA investigation.
The ASA upheld each complaint as misleading and banned the ads, ordering Stockmarket Insider to ensure testimonials were genuine and to keep proof of investment performance.
“Stockmarket Insider did not provide us with any evidence to demonstrate that they had outperformed other investment advisory services at key intervals during the abovementioned period, we concluded the claim had not been substantiated and was therefore misleading,” said the ASA.
No evidence offered
“We had been provided with no evidence that Stockmarket Insider had recommended shares in Britvic plc on 23 July 2012 and while we understood that the value of shares in the company had increased over the period referred to, we had not been given any evidence that they had increased by the quoted rate of 248.7%. Considering that, we concluded that the claim had not been substantiated and was therefore misleading.
“We considered that consumers would expect the testimonials featured on the website to be the genuine views of Stockmarket Insider customers. Stockmarket Insider had provided no evidence relating to the veracity of the testimonials. Because we had not seen evidence to demonstrate the testimonials were genuine, we concluded that the ad was misleading.”