Groupon given three months to turn its act around

Groupon is in trouble. We’re not talking about its easily replicated business model or its shaky IPO either. The group-buying giant is being taken to task by UK regulators.

The Office of Fair Trading (OFT), which enforces consumer protection and competition law in the UK, has given the company three months to improve the way it operates.

The OFT made the ruling after conducting an investigation that found “widespread” examples of Groupon breaching consumer protection law.

More specifically, the OFT expressed concerns over “pricing, advertising, refunds, unfair terms, and the diligence of its interactions with merchants”.

“Groupon acknowledges that our processes and procedures have not always kept pace with our rapid growth” said Groupon’s UK managing director Roy Blanga.

Blanga claims that Groupon is cooperating fully with the OFT’s recommendations :

“We have independently made many improvements since early 2011 and have worked transparently and constructively with the OFT to identify areas that require further changes. We take their concerns very seriously and will be willingly implementing the recommended changes.”

That seems to mirror the sentiment coming out of the OFT:

“Groupon has cooperated fully with our investigation and is making changes to its business practices to address our concerns. We will be monitoring the situation closely to ensure that consumers benefit from these improvements,” said the regulator’s Cavendish Elithorn.

According to the BBC, the complaints that saw the OFT taking up its investigation Groupon included exaggerated discounts and a time limit on taking up the offered discounts.

While the body’s investigation and subsequent ruling only apply to Groupon UK, it is not the only country in which the deal site’s practises have been called into question.

The company faced a lawsuit in the US late last year after it was accused of altering email agreements with merchants after both parties had agreed to the terms and conditions.

A sweep of South African consumer advocacy site Hello Peter meanwhile revealed complaints about everything from an inability to unsubscribe from the service’s mailing lists, to a failure to deliver vouchers and poor customer service.

The group-buying giant has also been taken to task by the Advertising Standards Authority of South Africa