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OFT launches Groupon investigation

02 December 2011 by
OFT launches Groupon investigation

The Office of Fair Trading (OFT) has launched an investigation into voucher website Groupon after it broke UK advertising regulations 48 times in 11 months.

Groupon has been referred to the OFT by the Advertising Standards Authority (ASA), according to the BBC.

The OFT has actually been conducting an investigation in secret into Groupon since July, but the investigation became public after the ASA voiced its concerns.

The advertising watchdog has made 11 formal rulings of code breaches against Groupon, details of which have been published. It has also made a further 37 judgements over breaches, details of which have not been released.

The website seeks offers at very preferential rates from businesses. The idea for those businesses is that it will attract new customers who will then use their services regularly.

Among the most recent advertising regulation breach by Groupon was a promotional email offering discount cosmetic surgery. It was banned by the ASA, which ruled that Groupon "pressured" consumers into hurriedly making potentially life-changing decisions in just a few hours.

Groupon has also been gaining popularity within the restaurant and hotel trades.

In a statement, the company said: "Groupon constantly strives for business practices that are in the best interest of consumers.

"We are constantly evolving business process to ensure customers receive the best possible experience at the highest standards.

"We are co-operating fully with the OFT to ensure that the rights of consumers are protected."

Why discounting could drive up prices >>

By Neil Gerrard

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