Robo-adviser Nutmeg has tackled a website claiming to offer promo codes for it to carry out a free portfolio review service for customers.
The Advertising Standards Authority was told website www.greenpromocode.com purported to offer online discounts for the Nutmeg's services that were not genuine.
Nutmeg informed the authority it had not provided Greenpromocode with any discounts to be used on their website and challenged whether the promotions were therefore misleading.
On 17 October 2017 the website featured the headline "Nutmeg Promo Codes 2017."
Text stated "We have three Nutmeg coupons for you to consider including zero promo codes and two deals in October 2017.
"Grab a free nutmeg.com coupons [sic] and save money. Nutmeg is an online investment management service".
Text under the heading "Nutmeg Deals & Discounts for October 2017" promoted three deals with Nutmeg.
The first promotion stated "Free Preview Portfolio Available. Click this amazing deal and make use of these financial benefits provided by Nutmeg at no cost" alongside a "Get Deal" link.
Text above the claim stated "Coupon Verified! Five People Used".
The second promotion stated "£0 Initial Fees Available. Use this amazing deal to know all your financial investments and service details by setting up your account with no changes. Be first to grab it" alongside a "Get Deal" link.
Text above the claim stated "Six People used".
The third promotion stated "Start an Isa from as little as £500. From as little as £500 you could open and start saving with your new Nutmeg Isa account" alongside a "Get Deal" link.
Text above the claim stated "One People Used".
Fayong Hu, which traded as Greenpromocode.com, did not respond to the ASA's enquires.
Concerned by Greenpromocode.com's lack of response and apparent disregard for the advertising standards code, the authority reminded them of their responsibility to provide a substantive response.
The authority ruled consumers would think the advertised promo codes were genuine promotions offered by Greenpromocode.com that could be used on the Nutmeg website and this was misleading.
The authority stated the advert must not appear again in its current form.
Greenpromocode.com was told to remove the deals from their website.
Back in October Nutmeg reported it had seen its losses increase to £9.3m for 2016.
The robo-adviser's pre-tax losses went up from £8.9m in 2015 as its operating expenses increased by nearly £1.2m.
Meanwhile Nutmeg’s turnover increased as well, but by around £800,000.
The company’s accounts reveal it increased the amount of cash it has in the bank from £8.9m to £27m after receiving funding from investors, including £24m from Hong Kong financial advice firm Convoy and £12m from Taiwan-based Taipei Fubon Bank.
Despite this Nutmeg has said it may need more funding if it is to remain a going concern.
The business reported: "The directors have carried out a detailed review of the trading position and cash flow projections for the foreseeable future and have, based on the results of this review, determined that the company may require further cash injections to continue to develop and market its product offering and to build its customer base and its assets under management.
"Under such a scenario, the directors have a reasonable expectation of securing additional funding from the existing shareholders and new investors."
Nutmeg's other backers include Schroders, Pentech, Balderton Capital and Armarda Investment Group.
Nutmeg managed £600m in assets under management on behalf of 25,000 customers, as of the end of December 2016.
emma.hughes@ft.com
