Online group buying group LivingSocial has been hit with a court enforceable undertaking after the consumer watchdog Australian Competition and Consumer Commission raised concerns about its contracts and website advertising.
It is the third such action taken against online group buying companies after Scoopon paid penalties of $1 million for making false or misleading representations to both businesses and consumers.
Similar claims against Spreets will see it in the Federal Court in 2015.
The ACCC said, in its view, LivingSocial engaged in misleading and deceptive conduct on its website about consumers’ refund rights in 2011 and 2012 and made false or misleading representations about the price of certain deals.
Online group buying websites are often referred to as ‘daily deals’ or ‘deal of the day’ sites, and typically sell vouchers for heavily discounted goods or services.
“Businesses selling to consumers online have the same obligations under the Australian Consumer Law as all other businesses, and consumer guarantees, including refund rights, apply when consumers purchase online,” ACCC chairman Rod Sims said in a statement.
“Online businesses must ensure that they do not mislead consumers about their consumer guarantee rights, and that the price and any restrictions on a deal being offered are clearly and accurately stated.”
LivingSocial has acknowledged it may have contravened the Australian Consumer Law (ACL) and that a term in its consumer contacts were likely to have been an unfair.
The enforceable undertaking contains a range of measures, including displaying prices of deals that include all of the mandatory extra fees, except for delivery fees.
The company must also give customers who have purchased vouchers refunds where they are entitled to refunds, and develop and implement a compliance program.
The ACCC and other state authorities say they have received a significant number of complaints since the online group buying industry emerged in Australia in 2010.