Daily Mirror (Northern Ireland)
Beware the wild claims behind social media ads
Facebook in firing line for non-regulated investment schemes
NICK Clegg has been busy insisting that Facebook is still working hard to protect its users from harmful content.
“We take these things seriously, try to act responsibly and transparently, and invest huge amounts in keeping our platform safe,” says the president of global affairs at Facebook’s owner Meta and former leader of the Lib Dems.
Safe? Facebook is awash with adverts that are potentially very harmful to your bank balance.
Among the ones I spotted this week was one declaring that art can offer investors “explosive growth”.
The plug for London investment company Woodbury House featured a painting by street artist Richard Hambleton that sold in 2019 for $225,000, a 2,105% profit.
The Woodbury House website features the same painting and profit figure.
What the ad and website did not say is that Woodbury House had nothing to do with the sale, which was conducted in New York by global art auction house Phillips.
Nor did the advert say that investments in artworks are not covered by the Financial Conduct Authority, so you’ll have no recourse to the Financial Services Compensation Scheme if a deal goes sour.
Woodbury House was founded by 36-year-old Steven Sulley, who remains its “expert” despite last year being banned from being a company director for 11 years over his conduct at a company called Pure Carbon Ltd.
This lot ripped off investors to the tune of £3.1million by flogging supposedly green “carbon credit” investments at vastly more than their true market value.
The Woodbury House director is now 32-year-old Joseph Bannon, who insisted there was nothing wrong with using an artwork it never sold in its promotional material.
“I do not think it is misleading, we have not implied nor stated that
Woodbury House did sell it,” he insisted.
He told me that he is aware of Sulley’s past, saying: “I do hope you are not under the presumption that Woodbury House is in some form of a scam company. We buy and sell works by street-art pioneers, we have done worldwide shows.
“I would like to think we have a solid reputation for what we do.”
Next up we have Facebook ads for Montague Cromwell that promise “an assured rental yield of up to 8% for 10 years” and its website claims that they’ve sold property worth £350million.
Seems unlikely. Montague Cromwell is a trading name of Sakura Incorporations Ltd, which was only incorporated in August 2019.
Its director is Lloyd Walker. Something missing from his Linkedin profile is the fact he previously ran Prospero Asset Management Ltd, which went into liquidation with creditors losing £1.6million. He hasn’t replied to my questions. Then there’s a Facebook ad bragging of a 56% profit from a wine investment.
This advert led to wine investment company Oenofuture Ltd of London and the guarantee that wine was a “proven, safe and stable” investment and “fully insured with FCA regulated third party”.
Far from being FCA regulated, wine – like works of art and property – is not covered by the watchdog. Oenofuture has not replied to me. Investment expert Mark Taber is appalled at Facebook’s failure to tackle ads like these.
“A simple measure to protect users would be for Facebook to only carry investment advertisements if they are placed by companies registered with the Financial Conduct Authority,” he said.
“Despite years of campaigning they have still failed to implement this basic safeguard.”
Facebook says that it has started “rolling out a new process” that requires all financial services advertisers in the UK to be authorised by the FCA.
It’s clearly got some way to go.
“Expert” was banned from being company director for 11 years