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Groupon’s advertising practices under scrutiny in U.K.

Daily deal website investigated over allegations of exaggerated savings

Fifty percent off eyebrow threading at that insalubrious, garden-level salon down the street. Twenty-five pounds off Swedish food at your neighborhood lutfisk joint. Sixty-nine percent savings on 75 pounds of cat food at the local pet store. Don’t all these deals seem just a little too good to be true? Well, some concerned British citizens think many of Groupon Inc.’s daily deals may be just that.

The U.K. Office of Fair Trading (OFT) has been looking into complaints that the British unit of Groupon has issued unfair promotions, including not clearly indicating significant terms and conditions; failed to provide evidence that the offers were available; and exaggerated savings.

The regulatory authority began its probe of the Internet deal website in July, but expanded its efforts after receiving more complaints from the U.K.’s Advertising Standards Authority (ASA).

The ASA issued a statement today indicating that it will now refer all complaints about Groupon to the OFT.

“We are taking this approach because, given Groupon’s track record, we have serious concerns about its ability to adhere to the Advertising Code,” the ASA wrote. “It is in the public interest that we refer the matter to the OFT, the OFT being better placed to address any underlying issues concerning Groupon's trading practices generally.”

The ASA notes that it has formally investigated and upheld complaints about Groupon on 11 occasions in 2011, and informally resolved 37 cases.

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