Due to over 60 complaints investigated by Britain's Advertising and Standard's Authority the Office of Fair Trading has told Groupon to clean its practices up while it keeps a watchful eye. "The investigation found widespread examples of Groupon's practices which in the OFT's view breached consumer protection regulations," explains the OFT in a statement made today. "The OFT has specific concerns over practices involving reference pricing, advertising, refunds, unfair terms, and the diligence of its interactions with merchants." Here are all the ways Groupon wronged its clients.
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The OFT has been investigating Groupon since December after the ASA brought to its attention its formal complaints, which have all occurred within the last year and a half. The ASA breaks its investigations down into to two groups: Adjudications and Informally Resolved Cases. Against Groupon, we see 19 adjudications and 43 informally resolved cases. Under the adjudications section we'll find the juicy stuff, an ASA representative told The Atlantic Wire because those are the cases where Groupon wants to defend its ad. The informally resolved cases are more "clear cut," said the ASA rep -- things like clarifying terms and condition languages. The ASA doesn't give much information on those informally resolved disputes. But we get the full details of those 19 more involved scams.
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- "Choice of Facial Injection Treatments" deal advertised a prescription drug to the public.
- "One Pair of Weight Loss HOTPANTS™ for £19 from Zaggora (58% Off)", "Uses Celu-Lite™ technology" deal wrongfully implied product would lead to both weight-loss and a decrease in cellulite.
- 'Wrinkle Killer Snake Serum" deal advertised a product that could not fulfill promises to have temporary freeze-like effects on the face muscles; reduce the appearance of fine lines and wrinkles, tackle the signs of ageing and leave the skin looking younger
- "Return Flights From London To 25 International Cities for £39 Base Fare with AirFastTickets" said it excluded taxes but it did not.
- "Today's deal: 50 Laps of Go-Karting for £15 with Karting 2000 (Value £45) ... Discount 67%. You save £30.00" said the deal saved buyers more than it did.
- "One Year Midweek Delivery Pass Plus £40 Worth of Groceries for £39 from Ocado (£110 Value)" stated the wrong "usual" value of the pass.
- "Six Sessions of IBE Breast Enhancement for £99 at Beautopia Spa (£1200 value)" deal said boobs would grow bigger, faster than the spa advertises.
- "£1,999 Instead of £5,000 for Cosmetic Surgery Such as Breast Augmentation and Rhinoplasty at Birkdale Clinic" was called "irresponsible because it encouraged recipients to hurry into a decision to purchase cosmetic surgery."
- "One Night Stay For Two With Breakfast (£79) or Two Nights Plus Three Course Dinner (£149) ... (Up to 59% Off) Buy it Now! Amount: from £79.00 Discount 52% You save £86.50". Further text stated "£79 for one night stay for two with breakfast (£165.50 value)" lied about the actual value of a hotel stay with breakfast.
- "Laser Teeth Whitening at Smart Smile for £89 (value £350)" the value of the deal had again been exaggerated.
- "Food Intolerance and Allergy Testing Session for £59 at Live Blood Test" promised to detect food intolerances and allergies, assist with weight loss, help battle fatigue; and help maintain the body's natural defence mechanism, none of which was true.
- "£98 for £1650 towards Invisalign Teeth-Bracing Technology and Whitening at Q Clinic. View now For £98,00 [sic] Discount 94% Saving £1552,00" required additional payment for treatment.
- "Lengthen Those Lashes with Eyelash Extensions from Bo Chic for £24 instead of £90" another lie about the true value of the product.
- A Groupon ad for "ALL YOU CAN EAT in London £3" led to no such deal.
- Another group of misleading Google banner ads.
- "£9 instead of £30 for a 20 Minute Garra Rufa Fish Natural Pedicure for Two People at Wonderfeet," could not be used at the spa being advertised.
- "Today's deal: £24 instead of £92 for a four course meal for two, a bottle of wine or two pints of any alcoholic or soft drink at the multi award winning, Waggon and Horses - Save 74%" actually tallied to less than 74 percent savings.
- "£9.80 for a South American banquet" required a buy-one-get-one free half off deal that was not stated; did not make clear the deal was not available on weekends without an extra fee and exaggerated the savings.
- "£1 instead of £15 for an exhilarating all-day paintballing session including kit, 100 paintballs and lunch at EK Paintball - Save 93%" misstated the original price of the session and required coupon holders to either purchase extra equipment or miss out on lunch.
And this is just the stuff happening in England. We've heard of price inflation and other scams stateside, too. The company has said it will cooperate full with the OFT, which is giving the daily deals site 3 months to stop the deceitful deals.
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Since Groupon's explosion and high profile road to IPO, the company has been scrutinized for its shaky business model, in part because of the way it deals with both customers and clients. Since going public, it has had a rocky road. We imagine this won't help.