A group-buying website has been censured for misleading customers with a heavily-promoted iPhone 4 sale, which drew in 15,000 people despite only eight handsets being available.
The Office of Fair Trading (OFT) found that Groupola.com, owned by Markco Media, used “bait pricing” to entice customers to sign up to the website in order to buy the Apple phone for £99 instead of its normal retail price of £499.
The iPhone 4 sale was promoted with a press release, national newspaper interview and Facebook and Twitter marketing campaigns in a bid to get people to sign up to daily email alerts from the website.
Group buying websites typically offer a discount that is only activated when a specified number of people agree to purchase a service or product.
The promotion took place just after the phone’s launch, when demand for the new model was extremely high and customers would have had no idea that so few handsets were available.
Advertisement
During the promotion, a sale progress bar on the website at one point indicated over half of the iPhone 4s were still available and above this was a caption which read “202 bought”.
The company claimed at the time that more than five million people visited the site during the sale.
The OFT said a Groupola.com employee represented himself as an ordinary customer on the company’s Facebook page to post positive comments about the company. The employee even stated explicitly in his post that he did not work for Groupola.com.
The company’s director, Mark Pearson, has appeared on the Channel 4 programme Secret Millionaire.
The OFT has secured an agreement from the company and its director not to run promotions where the scale of the advertising completely dwarfs the supply of products.
Advertisement
Groupola.com and its director have also agreed to ensure that employees and those affiliated with the company disclose this relationship in any statements they make online.
Heather Clayton, senior director of the OFT’s Consumer Group, said promotions must be fair and transparent in order for customers to be able to shop around effectively and trust advertisements.
She added: “It is never acceptable for traders to pretend to be independent consumers. It is increasingly the case that people make purchasing decisions based on online peer recommendations and the OFT will continue to prioritise cases that protect the integrity of online consumer reviews and comments.”