Ruling

01469-16 Greenwood v Daily Mirror

    • Date complaint received

      12th May 2016

    • Outcome

      No breach - after investigation

    • Code provisions

      1 Accuracy, 10 Clandestine devices and subterfuge

Decision of the Complaints Committee 01469-16 Greenwood v Daily Mirror

Summary of complaint

1. Talisha Greenwood complained to the Independent Press Standards Organisation, on behalf of Wynn XS Ltd, that the Daily Mirror breached Clause 1 (Accuracy) and Clause 10 (Clandestine devices and subterfuge) of the Editors’ Code of Practice in an article headlined “Secret tricks of wine cold callers”, published on 10 March 2016. It was published online on 9 March 2016 with the headline “The secret tricks of wine cold callers revealed – and how boss bottled it when confronted”.

2. The newspaper had arranged for a staff journalist to apply for a job and “go undercover” at Wynn XS, and the resulting article reported that the company “uses cold callers to persuade people to take their savings out of the safety of a bank account or pension and pump the money into fine wines”. It reported the sales techniques used by the company’s employees, and said that the brokers discourage people from seeking independent financial advice before investing.

3. The complainant said that the journalist’s taking a job at the company, using a false identity, was a breach of Clause 10. She also raised a number of other concerns about the accuracy of the article: she said that the CEO of the company had not told the journalist that in order to get people to invest money they “hypnotise them”; that the CEO had not said that four people were “earning more than the CEO of British Gas”; that senior sellers do not lie about having worked at Goldman Sachs; that a senior broker had not said “it’s a hard life this brokering lark, you chat to people and earn a f*** ton of money”; and that Wynn XS is not an investment company but a sales company and therefore is not subject to regulation by the Financial Conduct Authority (FCA). She also expressed concern that the article had been illustrated by a photograph of the CEO which was nine years old and had no connection to his current business. She provided an alternative photograph for the newspaper to use online.

4. The newspaper said that the investigation was justified in the public interest. Before the journalist applied for the job the justification was considered internally by the Editor of the column, the Associate Editor and the legal department. It was then considered again prior to publication of the article. The newspaper said that it would not have been possible to confirm that the company was actively encouraging its sales staff to lie about themselves and put pressure on potential customers without applying for a job there: they had not been contacted by any “whistle blower”, and the company would not have openly admitted that staff were working from a script. The journalist had applied for and been offered two jobs as part of the investigation; both companies had been featured in the article.

5. The newspaper had considered that it was likely that Wynn XS was a “boiler room”, selling over-priced investments to the public. The newspaper said that there were many examples of people expressing concern about Wynn XS and Prime Trading 5 (the company’s previous name) online, and a number of factors were considered: “boiler rooms” often sell fine wines, as in this case; it appeared that the job would involve cold-calling, which is typical of “boiler rooms”; the promised earnings were largely based on commission and were extremely high; Prime Trading 5 had been exposed for over-valuing wine and high-pressure sales techniques; and despite the fact that the company website says it has been active since 2006 it had in fact been dormant until a few years ago.

6. The newspaper said that the journalist had been told in her job interview that some people in the company “earn more than the CEO of British Gas”. Immediately after the interview finished the journalist had written notes of it on her mobile telephone and had then emailed the notes to herself. The interview was at 12.20pm and the email was sent at 12.53pm; the newspaper provided a copy of the email. During sales training the journalist had taken longhand notes, which included the phrase “we hypnotise them”. It said that the comment about making a “f*** ton of money” was attributed to the “blonde closer” in the journalist’s notes. During training a 17-year-old employee had made a presentation about a sales pitch he had been asked to learn in order to “close” deals. In the pitch to potential investors he said that he had been married for 5 years, had a son named Theodore, and had worked for Goldman Sachs for 11 years. The journalist had also overheard this same line used by salespeople in the company over the course of the day she had worked there. The newspaper said that the scripts used by Wynn XS (copies of which the newspaper provided to IPSO) make it very clear that it considers itself an investment company. The scripts ask at what level people would feel comfortable investing, describe the process as “you buy wine, hold then you sell at a profit, it’s that simple”, and tell customers that they could conservatively make a 15% yearly return. The newspaper changed the photograph which accompanied the online article to the one provided by the complainant.

Relevant Code provisions

7. Clause 1 (Accuracy)

i) The press must take care not to publish inaccurate, misleading or distorted information or images, including headlines not supported by the text.

ii) A significant inaccuracy, misleading statement or distortion must be corrected, promptly and with due prominence, and – where appropriate – an apology published.

Clause 10 (Clandestine devices and subterfuge)

i) The press must not seek to obtain or publish material acquired by using hidden cameras or clandestine listening devices; or by intercepting private or mobile telephone calls, messages or emails; or by the unauthorised removal of documents of photographs; or by accessing digitally-held information without consent.

ii) Engaging in misrepresentation or subterfuge, including by agents or intermediaries, can generally be justified only in the public interest and then only when the material cannot be obtained by other means.

The public interest

1.    The public interest includes, but is not confined to:

i) Detecting or exposing crime, or the threat of crime, or serious impropriety.

ii) Protecting public health or safety.

iii) Protecting the public from being misled by an action or statement or an individual or organisation.

iv) Disclosing a person or organisation’s failure or likely failure to comply with any obligation to which they are subject.

v) Disclosing a miscarriage of justice.

vi) Raising or contributing to a matter of public debate, including serious cases of impropriety, unethical conduct or incompetence concerning the public.

vii) Disclosing concealment, or likely concealment, or any of the above.

4.   Editors invoking the public interest will need to demonstrate that they reasonably believed publication – or journalistic activity taken with a view to publication – would both serve, and be proportionate to, the public interest and explain how they reached that decision at the time.

Findings of the Committee

8. The newspaper had shown that - in advance of beginning its investigation - it had evidence of concern that Wynn XS was trading in a way which would not generally be considered acceptable. There was a clear public interest in investigating whether the company was using dishonest tactics to encourage customers to “invest” in wine. The newspaper would not have been able to establish the veracity of the claims on the internet about the company’s sales tactics without using subterfuge and misrepresentation, and the grounds for investigation were established at senior editorial level in advance. The investigation was justified in the public interest, and did not breach Clause 10.

9. The investigation had uncovered sales practices at Wynn XS Ltd which would generally be considered unethical. It was not disputed that sales staff were trained to claim to customers that “small fortunes are always being made overnight within this market”, and discouraged them from consulting with spouses or financial advisers before investing. The publication of the information which the newspaper had obtained using subterfuge and misrepresentation was justified in the public interest; there was no breach of Clause 10.

10. The newspaper had provided contemporaneous notes of the disputed quotations; there was no failure to take care over the accuracy of the story. On the basis of those notes; the fact that it was not disputed that new recruits are told that they can earn a lot of money at Wynn XS; and the nature of the sales tactics revealed by the investigation, the Committee did not establish that the quotations constituted significant inaccuracies which would require correction under the terms of Clause 1 (ii). 

11. Wynn XS sells people wine and tells them they could see a sizeable financial return on their purchase. It was not inaccurate for the article to describe Wynn XS as an “investment company”, and the newspaper had been entitled to note that no recourse to the FCA was available. Further, the use of an old photograph of the CEO to illustrate the article did not give a significantly inaccurate or misleading impression of the nature of the company that he now runs. There was no breach of Clause 1 on these points.

Conclusions

12. The complaint was not upheld.

Remedial Action Required

N/A

Date complaint received: 02/03/2016
Date decision issued: 18/04/2016