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OFT not so keen on Groupon offers

16 March 2012

MyCityDeal Ltd, trading as Groupon, has been suffering poor publicity following an investigation by the Office of Fair Trading (OFT). The OFT found breaches of consumer protection rules in multiple activities. A damning comment from the OFT stated concerns about Groupon’s “pricing, advertising, refunds, unfair terms, and the diligence of its interactions with merchants”… In other words: “Everything!”

This illustrates the extensive powers the OFT have to require businesses to change the terms on which they deal if in their opinion they are unfair – on pain of court sanctions. This can result in a business having to fundamentally change their operating procedures – plus negative publicity.

Groupon’s rise has been meteoric, but it now needs to take steps to protect its brand. To protect consumer confidence in the brand, Groupon would be well advised to mitigate its potential breaches and implement procedures to ensure that all of its activities are subject to legal compliance checks.

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