Groupon faces shake-up of daily deals as OFT steps in.

Marketing Week December 8, 2011 | Parsons, Russell onlineGroup buying site’s offers and advertising practices go under watchdog’s eye. By Russell Parsons Groupon could be forced to rethink the terms of its daily deals and how it promotes them after it emerged that its trading practices are being investigated by the consumer protection watchdog.

The Office of Fair Trading (OFT) is considering whether the group buying site is in breach of consumer protection from unfair trading and terms and contracts laws.

“Certain of its advertising practices” are also being investigated, the OFT adds.

News of the OFT investigation emerged after the Advertising Standards Authority announced it was referring complaints made about Groupon to the OFT, following “repeated breaches” of the advertising code.

Complaints relating to exaggerated savings, unavailable deals, not making terms and conditions clear and Groupon’s “failure to conduct promotions fairly” will now go directly to the OFT. go to website groupon las vegas

The ASA says: “We are taking this approach because, given Groupon’s record, we have serious concerns about its ability to adhere to the Advertising Code. It is in the public interest that we refer the matter to the OFT, the OFT being better placed to address any underlying issues concerning Groupon’s trading practices generally.” This year the ASA has formally investigated and upheld complaints against Groupon 11 times. It has also informally resolved 37 cases.

Just this week, Groupon saw two ads banned for being misleading. website groupon las vegas

It is not known when the OFT investigation, launched in July, will conclude. The OFT could take legal undertakings to stop trading practices that breach the regulations, which are enforceable through the civil and criminal courts.

Any enforced change will be a blow to Groupon. It listed on the New York Stock Exchange last month in the largest internet flotation since Google. The company has also recently launched it first UK TV ads.

Groupon says it “constantly strives for business practices that are in the best interests of consumers”, adding it will “co-operate fully with the OFT”.

The OFT promised a crackdown on misleading advertising of prices in a report last year. In it, time-limited offers of the kind that Groupon specialises in were singled out.

The problem of ‘complex pricing’, for example, where price depends on numerous, conditional elements was also highlighted.

Parsons, Russell