More good news for UK consumers, a clampdown by the Advertising Standards Authority (ASA) has resulted in three land investment companies having their advertisements banned for failing to disclose the financial risks involved for investors.

Using artificial intelligence, the watchdog identified online ads that breached its advertising rules, as part of a wider investigation into land and property investment promotions. In each case, the ASA ruled that the advertisements were misleading as they did not clearly outline the risks associated with such investments.

The companies affected by the rulings were Luxury Lodges, Land Profits, and Connect UK Sales.

False Claims of Six-Figure Profits

One of the cases involved Land Profits, a company offering training and mentorship on buying and selling land for development. The ASA reviewed two Facebook ads and the company’s website, which were active in August 2024.

The adverts promised:
“You are only one land deal away from six-figure profits.”

Meanwhile, the company’s website featured testimonials and videos under the heading ‘client results’, claiming financial freedom and a secure financial future.

The ASA ruled these ads were misleading because they failed to clarify that investments could lose value as well as gain and that past performance is not a reliable indicator of future results. Additionally, the watchdog noted that the company had not provided sufficient evidence to prove these earnings were realistic or representative.

As a result, the ASA ordered that these ads must not be used again in their current form.

Misleading ‘Guaranteed Returns’ on Luxury Property

Another case involved Luxury Lodges, a company promoting investment opportunities in holiday properties across five-star UK resorts. In July 2024, the company ran a magazine advertisement promising “guaranteed returns” for investors.

A specific claim in the ad suggested investors could earn “up to £83,454 over two years guaranteed return”. However, the ASA found this claim misleading, as it was based on past performance and failed to clarify that the guarantee applied only to rental income from a sublet scheme, not the property’s value.

Luxury Lodges argued that no capital appreciation was promised, and the ad referred only to a fixed two-year sublet return. However, the ASA ruled that the nature of the guarantee was not made sufficiently clear and that it could mislead investors into assuming the property value itself was stable.

As a result, the ASA instructed the company to ensure that future advertisements:

• Clearly state that investment values can fluctuate.
• Provide a transparent explanation of any guarantees.
• Include all mandatory fees and charges applicable to most buyers.

Exaggerated Investment Returns on Land Auctions

The final case involved Connect UK Sales, which ran a paid Facebook ad promoting “exclusive” land auction investment opportunities. Their website also claimed that selling land at auction could yield a return of 10-30%, outpacing traditional estate agent sales.

The company defended its ads, stating they were aimed at individuals who already owned or were looking to purchase land. However, the ASA found that no qualifying information was provided to substantiate the 10-30% return claim. Although the company supplied two case studies as evidence, one of them was several years old, making the data unreliable.

Consequently, the ASA ruled that both the Facebook ad and website landing page were misleading. Connect UK Sales was instructed to ensure that:

• Future ads clearly state investment risks.
• Any profitability claims are backed by solid, up-to-date evidence.

A Broader Crackdown on Financial Misleading Ads

The ASA’s actions highlight growing concerns over misleading financial promotions, particularly in high-risk investment schemes. This follows similar regulatory crackdowns by the Financial Conduct Authority (FCA), which recently removed nearly 20,000 misleading financial ads in 2024.

For more insights into how regulators are tackling misleading financial promotions, read about the FCA’s latest crackdown on deceptive financial advertising here: FCA News – Crack Down on Misleading Financial Ads

With both the ASA and FCA increasing scrutiny, businesses promoting investment opportunities must ensure their advertisements are transparent, accurate, and fully compliant with regulatory standards—or risk serious repercussions.

Our Thoughts

Property and Land Investments are very popular in the UK as we all consider property to be a safe investment. But it is important to remember that if you are not directly investing in bricks and mortar and are instead investing into a property company, property fund or a new development there is always increased risk.

If you are concerned you may have lost money due to a property investment you can learn more about how you may be able to pursue a claim on our investment claims area.