OFT investigates Groupon for possible breaches of consumer law

Groupon is under investigation by the Office of Fair Trading (OFT) for potential unfair trading practices following a referral to the consumer watchdog by the Advertising Standards Authority (ASA).

The firm, which offers daily deals on products from spa treatments to restaurant meals, has been found to have broken UK advertising regulations 48 times in 11 months and the OFT said the current investigation has been underway since July.

A representative for the government's consumer protection organisation said that at the moment it is limited in what it can say about the investigation. But was now making the issue public after the public announcement today by the ASA.

The ASA said details of 11 of the formal rulings against Groupon, have been published on its website. A further 37 judgements against the company have also been made but no details released.

Now it will pass on any complaints that it receives about Groupon to the OFT, while the investigation is ongoing.

"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," the ASA said.

The OFT said it was  "looking at whether Groupon is complying with consumer protection legislation such as Consumer Protection from Unfair Trading Regulations 2008 and The Unfair Terms in Consumer Contracts Regulations 1999.

Because the investigation is ongoing, the OFT said it "is not currently able to determine whether it considers the law has been infringed until it has completed its investigations and assessed the available evidence."

If Groupon is found in breach of any of these regulations however the OFT can apply for remedies which are enforceable through the civil and criminal courts.

A statement released by Groupon said it: "constantly strives for business practices that are in the best interest of consumers. We are constantly evolving business process to ensure customers receive the best possible experience at the highest standards. We are cooperating fully with the OFT to ensure that the rights of consumers are protected."