OFT tell Groupon to improve their business practises
The OFT is not happy with Groupon. The watchdog has decided to wade in after receiving an assload of complaints from customers and have said that they have discovered “widespread” examples of Groupon breaching consumer protection regulations.
The OFT said it was concerned over “reference pricing, advertising, refunds, unfair terms, and the diligence of its interactions with merchants”.
As such, they've ordered the company to make changes in six areas and wants to see:
- Accurate, honest and transparent reference prices on deals where adverts which compare an original ‘reference’ price against the sale price
- Realistic assessments of suppliers abilities’ to provide goods and services offered in the deal in the quantity or timeframe suggested
- Clearly and prominently displayed limitations concerning deals
- Reasonable steps taken to back up claims related to any beauty or health products offered
- Refund and cancellation policies in accordance with current regulations
- Fair terms and conditions.
Cavendish Elithorn not only has a spetacular name, but is also the senior director in the OFT’s goods and consumer group, and said: "Collective buying and discount schemes can offer real benefits for both consumers and merchants. The market is growing rapidly, but it’s important that consumers benefit from consumer protection law as well as from the discounted offers. Groupon has co-operated fully with our investigation and is making changes to its business practices to address our concerns."
Roy Blanga, UK managing director of Groupon, 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."