OFT raises Groupon concerns

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Groupon logoCharles Rex Arbogast/AP/Press Association Images

We all love a bargain. Even more, we all love a local, exclusive bargain, emailed directly to our inbox to tempt us. What we don't like is an endless barrage of deals that aren't quite what they seem, questionable advertising, and serious concerns over terms and conditions.

So the OFT's statement about Groupon makes for worrying reading.

OFT investigation

The Advertising Standards Authority referred the company to the Office of Fair Trading back in December, after it emerged that the company had overstepped the mark in its adverts an astonishing 50 times in a year. The OFT had actually already started looking into the company the previous July.

It's findings make grim reading. In a statement it said: "The OFT has specific concerns over practices involving reference pricing, advertising, refunds, unfair terms, and the diligence of its interactions with merchants."


Change

The OFT said the company had agreed to adhere to the consumer protection laws in future, with a specific focus on certain areas. This includes the sorts of things that you would have hoped were already in place in any company. So, for example, reference prices (adverts that compare an original reference price against a sale price), including savings, should be accurate, honest and transparent.

The OFT also said Groupon must display all the details of the limitations clearly and on the same screen. It also wants the company to carry out an accurate, honest and realistic assessment of a merchant's ability to provide goods or services in the quantity or time frame suggested. This was partly in response to reports of some companies being overwhelmed with orders they were unable to deliver.

It also wants fair terms and conditions, and for refunds policies and cancellation rights to be operated in accordance with the Distance Selling Regulations.

In future

It says it will monitor performance on all these fronts, and said "Should evidence emerge of a breach of any of these undertakings, the OFT will consider appropriate measures, including applying to court for enforcement orders."

Groupon is saying all the right things now. It has been co-operating with the OFT, and Roy Blanga, UK managing director at Groupon, posted a blog on the website, apologising, and adding "We believe that the only way to build a company that lasts is to provide the best customer experience in the world, and it pains us when we fall short".

So is that enough? You have to ask why it has been allowed to get away with 50 transgressions in a year with just a rap on the knuckles.

Only time will tell whether the company can turn things around. But what do you think? Do you rate daily deals websites, or do you have your own concerns? Let us know in the comments.

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