Date:16 March 2012
OFT warms Groupon to amend practices
Daily deals website Groupon has been told to improve the way it operates by the Office of Fair Trading. The OFT has been investigating MyCityDeal, which operates as Groupon, since July last year, following consumer complaints and a referral by the Advertising Standards Authority concerning the company’s ability to stick to advertising codes of practice. The investigation found “widespread” examples of breaches of consumer protection rules, with specific concerns relating to pricing, advertising, refunds, unfair terms and the diligence of its interactions with merchants.
The OFT has instructed Groupon to inform it of complaints it receives and given the company three months to improve the way it operates. The daily deals website has agreed to ensure that prices quoted, which compare the original price against a sale price, are accurate, honest and transparent in future. Groupon must also ensure it carries out an honest and realistic assessment of a merchant’s ability to provide the goods and services offered in the quantity or timeframe advertised. The OFT said Groupon must also ensure products are displayed clearly and prominently on the same screen or before purchase, giving full information on limitations which apply and take “reasonable steps” to ensure that health or beauty product claims are realistic. The company must also ensure that terms and conditions are fair and that refund policies comply with the Distance Selling Regulations.