Between 1 January and 30 June 2011, when the numbers of daily deal websites rose dramatically, the Commission received an average of 22.5 complaints per month. By October and November 2011, the average was 10 complaints per month from 85 websites.
Complaints about daily deal and group buying websites soared last year, prompting the Commerce Commission to up its consumer law education for the providers.
Between 1 January and 30 June 2011, when the numbers of daily deal websites rose dramatically, the Commission received an average of 22.5 complaints per month. By October and November 2011, the average was 10 complaints per month from 85 websites.
The type of complaint also changed over that period. Initial complaints focused on traders not supplying goods or services promised, or imposing extra conditions which meant that vouchers could not be redeemed. Recent complaints have focused more on misleading advertising statements and misleading recommended retail prices.
Commission competition branch manager Greg Allan says the market regulator acted as soon as it started to see “concerning trends emerging in the daily deal and group buying market place”.
“Earlier last year, our intelligence unit identified this as an area where we were increasingly likely to see complaints. We then started to see numbers of complaints reported to the Commission begin to climb. As a result, we’ve been targeting the websites, talking to them about their compliance programmes, checking how they vet advertising, and how they deal with complaints,” he said.
Under the Fair Trading Act, it is illegal for any business whether they are operating in the real or virtual world, to mislead consumers, give false information, or use unfair trading practices.
While issues continue to emerge, Mr Allan said the levels of complaints to the Commission have been steadily dropping since it we began talking to the websites about these issues.
Mr Allan said it was particularly important as the market evolved that the Commission’s focus remained on the websites rather than the individual traders as the websites are in a better position to obtain compliance before offers are published.
“These deals are now targeting consumers in real time. You could be walking down the street and want a meal, and look to your smart phone to find out which deals are nearby. You can buy on the spot, download the barcode, walk into a restaurant and get the deal.”
