Groupon to be investigated by UK consumer body over misleading adverts

Daily deals website Groupon is set to be investigated by the Office of Fair Trading (OFT), the UK consumer protection body, after it was found to have regularly broken advertising regulations throughout this year.

It’s claimed that Groupon fell foul of advertising laws almost 50 times in the first 11 months of 2011, and the Advertising Standards Authority (ASA) has finally referred the company to the OFT.

As the Guardian reports, it seems that the OFT launched its own secret Groupon investigation back in July, though this only came to light when the ASA referred the case on to them. “This investigation is ongoing and the OFT will not be in a position to determine whether it considers the law has been infringed until it has completed its investigations and assessed the available evidence,” said an OFT spokesperson.

The last time the ASA referred a case to the OFT was back in 2008, when budget airline RyanAir was accused of repeatedly breaking advertising regulations. And it was the repeated regulations-breach – 48 in total – which led the ASA to passing the case on to the OFT in this instance.

The ASA said today that the referral was based on complaints that specifically concern Groupon’s:

• Failure to conduct promotions fairly, such as not making clear significant terms and conditions
• Failure to provide evidence that offers are available
• Exaggeration of savings claims

“We are taking this approach because, given Groupon’s track record, we have serious concerns about its ability to adhere to the Advertising Code”, said ASA earlier today. “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.”

The ASA also explained that it had formally investigated and upheld complaints against Groupon’s advertising on 11 occasions so far this year. “We have also informally resolved 37 cases”, it added. “We will continue working closely with the OFT on these issues to ensure consumers are protected.”

It seems that Groupon’s most recent breach was only last week, which led to the ASA banning a promotional email campaign that offered bargain-seekers discounted cosmetic surgery. It felt that this pressured the public into making big, life-changing decisions in a short timeframe.