Commerce Commission dealing with daily deal sites at the source

Wednesday, January 11, 2012

The Commerce Commission has stemmed a growing tide of complaints about daily deal and group buying websites with a proactive approach to educating the websites about consumer law.

Greg Allan, Manager Competition Branch, says the Commission was on the case 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,” said Mr Allan.

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.

“We have been particularly heartened to see a number of these websites taking responsibility, including by issuing refunds to customers whose deals haven’t gone according to plan,” said Mr Allan.

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.”

“The fast-changing nature of these deals means we have to be ahead of the game, rather than picking up the pieces at the end, which is why we’ve taken a proactive approach,” Mr Allan said.

“Consumers also need to know their rights and do their homework. Anyone looking to take up a deal should carefully check the offer, including the terms and conditions, and if unsure of any part of the offer, contact the supplier making the offer to confirm details ” said Mr Allan.
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