Groupon, the daily deals website, has been given three months to improve the way it operates after an investigation by the Office of Fair Trading (OFT) found that the company regularly breached consumer protection laws.
Concerns surrounding pricing, advertising, unfair terms and conditions as well as refunds by MyCityDeal Ltd, which trades as Groupon, has promised to get the business in shape.
Groupon guilty of breaching consumer laws
Last year a Which? investigation into group-buying sites, including Groupon, uncovered a range of problems such as discounts based on the maximum you could pay, extensive exclusions and hidden costs. A promotional email from Groupon offering discounted cosmetic surgery was subsequently banned by the Advertising Standards Authority (ASA).
Groupon was actually found to have breached UK advertising regulations 48 times in 11 months which the ASA referred to the OFT in December
What Groupon needs to do
Following the OFT’s investigation, which was launched in July last year, Groupon has agreed to make sure the offers it advertises are accurate, can be delivered in the quantity and timeframe suggested, while clearly outlining any limitations. It must ensure terms and conditions are fair and also apply the rules on refunds and cancellation rights for anyone buying online.
Groupon also needs to take reasonable steps to ensure any claims relating to health or beauty products are backed up.
The OFT will now monitor complaint numbers closely while Groupon must relay any complaints it receives on each of these practices. Should evidence emerge of a breach on any of the issues then the OFT could consider court action.
Groupon acknowledges its problems and vows to change
Groupon’s managing director Roy Blanga said: ‘As a young and innovative business Groupon acknowledges that our processes and procedures have not always kept pace with our rapid growth.
‘We have independently made many improvements since early 2011 and have worked transparently and constructively with the OFT to identify areas that require further changes.
‘We take their concerns very seriously and will be willingly implementing the recommended changes.’
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