Group buying website Scoopon has been ordered by the Federal Court to pay penalties of $1 million for false or misleading representations to both businesses and consumers.
Under the Australian Consumer Law, the court found Scoopon had mislead consumers about their refund rights; businesses about the idea that there was no cost or risk involved in running a deal when there was; and businesses on the fact that if only 30 per cent of vouchers were sold it would be not redeemed when there was no reasonable reason.
"The ACCC acknowledges Scoopon’s cooperation in resolving the matter by consent, which has enabled a more timely outcome to be reached," ACCC chairman Rod Sims said.
“The ACCC understands that Scoopon has worked to improve its systems and processes which gave rise to this conduct to meet its obligations under the ACL. However, this penalty serves as a warning to other businesses in the industry to improve their practices or face action from the ACCC.”
“Online competition and consumer issues are a priority for the ACCC. Online traders must understand their obligations are the same as traditional retailers’ and must not mislead customers or other businesses. The ACCC will continue to take further action in this area to improve business practices and protect small businesses and consumers.”
In addition, Scoopon was ordered, as part of a community service order, to prepare for and hold an educational seminar on ACL issues for other online group buying traders who are members of the Association for Data-driven Marketing & Advertising (ADMA).