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UK trade watchdog barks at Groupon

Investigation reveals widespread breaches of conumer regulations
Fri Mar 16 2012, 12:42

THE UK OFFICE OF FAIR TRADING (OFT) has accused 'daily deals' company Mycitydeal Ltd, which trades as Groupon, of breaching consumer protection regulations.

The watchdog said it has accepted undertakings from the company to change "some of its trading practices" following an investigation, which found "widespread examples" of malpractice. The OFT went on to reveal that it had specific concerns about practices involving reference pricing, advertising, refunds, unfair terms, and the diligence of its interactions with merchants.

"Groupon engaged openly and constructively throughout the investigation and has signed undertakings that it will change its practices to comply with the law. The company has three months to implement the changes," according to the OFT.

Roy Blanga, UK managing director of Groupon told The INQUIRER, "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."

Groupon has said that, in the wake of the investigation, it will ensure that reference prices - adverts that compare an original reference price against a sale price - are accurate, honest and transparent. The daily deals outfit also said it will prominently display all the limitations that apply to any deal on the same screen or before purchase.

The OFT said that it is keeping watch on the company, stressing it will monitor complaint numbers closely. "Should evidence emerge of a breach of any of these undertakings, the OFT will consider appropriate measures, including applying to court for enforcement orders," the watchdog said.

The OFT investigation, as we reported earlier, was launched in July 2011 following complaints from consumers. In December 2011 Groupon was also referred to the OFT by the Advertising Standards Authority following it finding multiple breaches of UK advertising codes. µ

 

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