Groupon admits to several customer service failures

Groupon, the daily deals provider, has admitted to several customer-service failures due to its unprecedented pace of expansion. The UK consumer watchdog had found ''widespread'' breaches of its rules.

Advertising Standards Authority received dozens of complaints from unhappy customers about various Groupon offers last year, which  included ''all you can eat'' restaurants, teeth-whitening services, discounted train tickets and supermarket deliveries.

According to the Office of Fair Trading, it was concerned that Groupon exaggerated its discounts, failed to honour deals and set ''unfair terms''.

According to the watchdog it had acknowledged efforts already made by MyCityDeal, Groupon's UK corporate entity, to change some trading practices. The deals provider also outlined over a dozen changes it was making to address the OFT's concerns, but had this week, found to be in breach of the advertising code.

The OFT investigation would go to the heart of Groupon's business model, which is based on advertising discounts on behalf of local merchants and national chains to millions of email subscribers.

According to the OFT, it would continue monitoring complaints against the company. ''Should evidence emerge of a breach of any of these undertakings, the OFT will consider appropriate measures, including applying to court for enforcement orders, '' it said.