Out-Law News 1 min. read

Groupon ad complaints to be referred to OFT following "repeated breaches" of rules


The UK's advertising watchdog has "serious concerns" about discounting online retail company Groupon's ability to obey advertising rules. It has referred complaints about Groupon adverts to the Office of Fair Trading (OFT).

The Advertising Standards Authority (ASA) said Groupon had repeatedly breached advertising rules and said is "in the public interest" that the OFT look into Groupon's sales practices more generally. Groupon is a popular consumer voucher operator with more than 6 million UK customers.

ASA said it has upheld complaints about Groupon adverts 11 times during 2011 and "informally resolved" 37 further cases involving the company.

"We are referring 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," ASA said in a statement.

"We are taking this approach because, given Groupon’s track 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," it said.

ASA can refer misleading advertisers to the OFT, the UK's consumer protection regulator.

The Consumer Protection from Unfair Trading Regulations prohibit unfair, misleading or aggressive selling practices. The OFT has the power to initiate legal proceedings against companies in breach of the regulations.

Misleading advertising is prohibited under UK advertising rules. The rules governing print and website ads are set out in the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing (CAP Code).

The CAP Code states that in general products which cannot be supplied should not be advertised and that businesses should not advertise goods without having "reasonable grounds" to believe they can satisfy demand or have explained why they might not be able to.

The CAP Code also prohibits marketers from exaggerating the capability or performance of a product and requires any claims made to be substantiated.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.