Groupola iPhone 4 Scandal Not Punished by OFT

Posted on Mar 10 2011 - 10:51pm by Richard Sharp

Groupola, a daily deals aggregator owned and operated by Marko Media has come under pressure after publishing a £99 iPhone 4 deal in June 2010. Emails were sent out to the sites members informing them that at 9:30am they would be given the chance to buy a ‘limited’ number of handsets at the knock down price of £99 with no info on the number available.

Inevitably users came to purchase in their millions, with 15,000 managing to register for the promotion in a matter of seconds before the site groaned to a halt. Not that it mattered as the handset deal had already been snapped up and finished whilst users continued to hand over their email and details to the site. A report by Tech Watch has speculated that there were only 8 iPhone 4 handsets available whilst real business pins the number at 200, based on information supplied  by Groupola’s CEO, Mark Pearson.  

Whether there were 8 or 200 available didn’t matter as consumers vented their frustrations and reported the issue to the Office of Fair Trading who looked into the matter and found various instances of dishonest (in other words fraudulent) practices. So what action was taken? Well it could be described as a ‘slap on the wrists’.

Their investigation uncovered the practice of ‘bait pricing’ by enticing users to sign up to the site without actually having the products to fulfil demand. The campaign included the distribution of PR materials, a newspaper interview and promotion through their social networking channels. Interestingly at one point the ‘progress bar’ showed 202 bought and it was only half full – remember that Mark Pearson had revealed they only had 200 after the event had ended.

iPhone 4 for £99 - amazing deal may have damaged Groupola

Groupola even posted comments on their own Facebook page about the promotion, the problem being they were pretending to be happy customers! The OFT also frowned upon this practise, yes I said frowned. You see Groupola has basically been let off with a warning, albeit with clear instructions and warnings of not to do it again.

One thing that is certain is that website owners, especially ones who make include offers will have to be whiter than white now that the OFT and ASA are policing the internet, well if they don’t want their wrists slapped that is –cough.

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