Groupon ad complaints continue to mount

The number of complaints made about Groupon advertisements has increased since the daily deals site was told to change its practices by the consumer protection watchdog.

Groupon

The Office of Fair Trading (OFT) found the company had breached consumer protection regulations in March following a lengthy investigation. Groupon agreed to six “undertakings” to ensure the claims made on its website about the savings and the benefits of its products and services could be substantiated and that its terms and conditions were fair after repeated breaches of advertising codes.

It was given three months to change its processes to comply with the OFT’s legally binding undertakings, a period that will end in mid June.

ASA data, however, shows that from 16 March to 11 May, almost two months since the OFT ruling, the daily deals site received 64 complaints about 64 ads although no adjudications were upheld. From 20 January to 15 March, two months prior to the OFT ruling, it received 62 complaints about 62 ads.

The data does suggest, however, that complaint volumes could be slowing. A Groupon spokeswoman says that it made several improvements – including expanding its compliance team – and has worked “transparently and openly with the OFT” on areas the watchdog thought needed addressing.

She adds: “Our aim is to provide the best possible service to our customers and merchant partners, a part of that process is to welcome feedback from our customers, merchant partners and regulators. It is only through listening to this feedback from our community that we can continue to deliver the best possible deals to our consumers and new customers to our merchant partners.

The news comes as Groupon says a better return on investment from its marketing spend helped lead to its first quarterly profit.

The daily deals company reported an operating profit of $39.6m (£22.9m) in the three months to 31 March, compared to a $117m (£72.7m) loss in the previous year. Revenue increased 74.6% to $559.3m (£347.4m).

Marketing costs decreased 49% year-on-year to $117m (£72.7m) and fell 25% quarter-on-quarter as the company switched its focus from acquisition to retention.

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