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Consumer & Business Advice
Media releases
28 March 2012

Skyrocketing complaints about discount deals offered through ‘group buying’ websites have prompted consumer protection agencies across the country to work together to address consumer concerns and improve business practices.

Minister for Business Services and Consumers John Rau said group buying websites only emerged in Australia in 2010 and so far they had proved to be extremely popular.

He said these sites sold vouchers online for discounted goods and services such as restaurant deals, beauty services, cleaning services, holidays and travel services.

“Typically, a minimum number of sales are required before the deal is ‘on’ and vouchers are valid for a limited time,” Mr Rau said.

“While the sites can offer great bargains, during 2011 there were 83 complaints in South Australia about group buying, and 3700 complaints to consumer affairs agencies nationally.

“Many consumers have reported problems in booking services, redeeming vouchers, goods or services not being provided, and difficulty obtaining a refund.

“In some cases consumers have been caught out by not properly reading the fine print, but in other cases there may be systemic issues with a particular trader or group buying deal.

“With the growth of the industry and the spike in consumer complaints there is a clear need for regulators to work together to ensure that traders and these websites operate within consumer laws.”

Consumer Affairs Victoria is leading the co-operative effort between regulators across the country to address the issue. The joint project involves research and analysis, compliance programs and public education.

A code of practice for the industry began in November last year. Signatories to the code include Scoopon, Spreets, Cudo, Groupon, Living Social, Jump On It, OurDeal, Ouffer and Deals.com.au.

Since the code’s implementation, complaints and enquiries on a national level have decreased from a peak of more than 600 in November 2011 to around 495 in January 2012.

“Consumer watchdogs around Australia support the introduction of the code, but we all agree there is still scope for the industry to improve,” Mr Rau said.