Daily Deals Industry Under Fire from OFT for Unfair Advertising Practises

Following from the Office of Fair Trading's investigation into Groupon after it received repeated complaints from consumers, the watchdog has escalated its clampdown on the daily deals industry.

Initially, The Advertising Standards Authority referred Groupon, the industry's biggest deal site, to the OFT in December because of "repeated breaches" to the advertising code.

A probe was then launched by the OFT which resulted in Groupon committing to changing its trading and marketing practices in March.

The OFT has said they are now satisfied with the changes Groupon has made, and consumer complaints have dropped in the three months since 16 March. They also claim that Groupon's amendments "set a clear" standard for the entire sector.

The watchdog's latest move has seen them sending out warning letters to 35 discount websites telling them to review their practices.

Changes that the OFT has outlined included ensuring adverts are accurate, honest and transparent when comparing an original reference price against a sale price; that refunds policies and cancellation rights are applied in accordance with Distance Selling Regulations; that they take reasonable steps to ensure health or beauty product claims are substantiated; and they clearly assess whether a merchant is able to provide goods or services in the quantity or time frame advertised.

Complaints about unfair commercial practices in the daily deals market are being monitored by the OFT, and they say they will undertake "targeted national enforcement action" against companies using practices that seriously breach consumer protection laws.

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