Watchdog adds to welfare-to-work firm woes

A4E, the controversial welfare-to-work company contracted by the government to support its flagship employment policy must stop claiming it is a ‘social purpose company’, the advertising watchdog has ruled.

A4E

The ruling is a fresh blow for the beleaguered company which lost a Department for Work and Pensions contract earlier this year. It is also embroiled in fraud allegations.

It was rapped after the Advertising Standards Authority (ASA) upheld a complaint that its company description on www.mya4e.com as ‘social purpose company’ could mislead the public into thinking it is a non-profit organisation, when it is in fact profit-making.

The ASA overruled A4E’s defence that the claim was justified because the “key focus” of its business was “positive social outcomes” and that the “majority of [its] revenue derived from contracts aimed at achieving long-term sustainable employment outcomes.”

A spokeswoman for A4E rejected the ruling and said it was considering appealing the decision. She adds: “In line with the ASA’s recommendation, we are amending our advertising. However, given that we continue to deliver services that positively impact on people’s lives, we are a private company with a social purpose.”

The ruling is the latest example of how the ASA intends to use its muscle to police online marketing communications after its remit was extended last year.

The move led to a 71% increase in the number of complaints received in 2011, according to the watchdog’s annual report, the majority about misleading claims on company’s websites.

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