Transparency is so important in modern business. We live in an age where sketchy behaviour is not remotely tolerated, and where bad noise is quickly amplified via social media channels.
You might remember an article we wrote about Groupola last summer. The group buying site had offered iPhone 4 handsets to gleeful shoppers for the very sexy price of £99 (usually £499).
The demand was such that the website imploded and frustrated consumers took to the virtual streets of Twitter and Facebook, to complain about not being able to access the sale.
At that stage Groupola was in a little trouble, but instead of holding its hands up it decided to dig a hole for itself. And then it climbed in and proceeded to dig deeper. The back story is here.
Today the OFT revealed that it has taken “enforcement action” against Marcko Media, which runs Groupola, for being somewhat shady.
- Groupola said 202 iPhones had been sold, despite there being just 200 available according to its website. The OFT found that it actually had a mere eight iPhones.
- 14,561 consumers signed up to the sale. Others couldn’t access the website, but Groupola’s bold claim that five million users had tried to access the website seems incredibly far-fetched.
- The OFT described the sale as ‘bait pricing’, essentially a way of convincing thousands of shoppers to sign up to Groupola’s daily emails.
- The investigation proved that a Groupola employee had published anonymous comments on the firm’s Facebook page, pretending to be a genuine customer.
The company doesn’t appear to have incurred a fine from the OFT. Instead it asked “the company and its director” to sign undertakings that prevent them from:
“offering for sale products in circumstances where there is a disproportionately inadequate supply of those products when compared with the scale of advertising and marketing”
“making statements (including comments on social networking and blogging websites) without clearly and prominently disclosing when the author is an employee or has another relevant relationship with the company.”
The OFT appears to be going after fake reviewers in a big way. Senior Director Heather Clayton said:
“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.”
The Groupola website now appears to be little more than a Groupon affiliate, though Marcko Media – run by Secret Millionaire Mark Pearson – operates other offer-based sites such as MyVoucherCodes.
Update: Mark Pearson has issued the following statement:
“We would of course like to apologise to anyone who was disappointed with the promotion that we ran in July 2010. We worked closely with the Office of Fair Trading during their enquiries to ensure that nothing like this happens again. When the issue first arose, nearly nine months ago, we immediately carried out our own internal investigation as to the cause of the problems and the members of the team responsible for the promotion are no longer with the company.”