CMA secures over £4 million in refunds for Wowcher customers
Following CMA action, Wowcher will change the way it promotes products and services to customers – as well as providing over £4 million in refunds.
- Wowcher to change its sales practices to avoid potentially misleading or unfairly pressuring consumers into making quick purchases
- Over £4 million in total refunded to 870,000 customers who were signed up to Wowcher’s ‘VIP membership’ via a pre-ticked box, in credit with the option to convert to cash
- CMA CEO: “Our action will make a real difference for the millions of people who use Wowcher”
The Competition and Markets Authority (CMA) has secured undertakings from Wowcher to change its online selling practices – meaning millions of people can expect to see clear and accurate claims about the availability of products and services on Wowcher’s website.
The move comes after the CMA launched an investigation last year over concerns that Wowcher’s countdown timers and marketing claims – such as ‘Running out!’ and ‘In high demand!’ – may create a false sense of urgency and influence people’s purchasing decisions.
The CMA is concerned that such ‘urgency’ claims risk giving the misleading impression that products shortly won’t be available, when this is often not the case. These claims, particularly when used with countdown timers, may pressure shoppers to buy quickly for fear they’ll ‘miss out’ – potentially leading to rushed purchases or people spending more than they planned to bag a perceived bargain.
In particular, the CMA was concerned that the overwhelming majority of products on Wowcher’s site continued to be available at a similar price once the daily countdown timer has ended.
The CMA was also concerned about Wowcher’s use of pre-ticked boxes to sign thousands of customers up to its paid-for ‘VIP membership’, which risks customers being signed up without their full understanding.
In November last year, the CMA wrote to Wowcher setting out its concerns and calling on the firm to change its practices – or else risk possible court action. As a result, Wowcher has signed formal commitments – known as ‘undertakings’ – meaning it will:
- only use clear and accurate countdown timers: Timers must not mislead consumers or give a false impression that they have to act quickly to avoid missing out on a deal. Wowcher will also remove its permanent countdown timer at the top of its homepage which states ‘Deals refresh in*: XX:XX:XX:XX’ [see Figure 1] and counts down to midnight, suggesting those deals may then change or end.
Figure 1: Illustrative example of a homepage countdown timer
- make sure all marketing claims are clear and accurate: Claims about the scarcity of a deal – e.g. ‘Almost gone – only 2 remaining!’ [see Figure 2] – must accurately reflect Wowcher’s remaining stock levels, among other things. Claims about the popularity of a deal – e.g. ‘In high demand!’ [see Figure 3] – must accurately reflect Wowcher’s sales figures, as well as how popular a deal is compared to other similar deals.
Figure 2: Illustrative example of a scarcity claim
Figure 3: Illustrative example of a popularity claim
- refund customers who were signed up to ‘VIP membership’ via a pre-ticked box: Wowcher will provide a credit refund – with the option to exchange to cash – to over 870,000 customers and will stop the use of pre-ticked boxes for VIP sign-ups, to ensure customers are fully aware of what they are agreeing to. Based on information provided by Wowcher, the CMA expects refunds for those affected will total over £4 million.
Sarah Cardell, Chief Executive at the CMA, said:
Pressure selling tactics – such as countdown timers and urgency claims that may create a false impression people must ‘Buy now!’ or miss out – can push shoppers into making snap decisions or spending more than they planned.
Our action will make a real difference for the millions of people who use Wowcher. Consumers who shop on the site can now have more confidence in the claims they see before parting with their hard-earned cash – and hundreds of thousands will soon see refunds, totalling a hefty £4 million.
We encourage all Wowcher customers to check their emails and texts from the company to keep an eye out for a credit alert – which they can exchange to cash should they wish.
To ensure Wowcher is complying with the commitments it signed, the firm must regularly report back to the CMA over the coming year.
The investigation into Wowcher forms part of the CMA’s programme of consumer enforcement action focused on ‘Online Choice Architecture’, which is aimed at tackling potentially harmful online selling practices – including pressure selling tactics such as urgency claims. The CMA’s ongoing investigations into Emma Sleep and Simba Sleep are also part of this programme.
For more information, visit the Wowcher case page.
Notes to editors
- The CMA’s investigation concerns Wowcher Limited, LivingSocial Limited and other firms in the same corporate group (‘Wowcher’).
- The undertakings or ‘formal commitments’ have been provided to the CMA voluntarily and without any admission of wrongdoing or liability. It should not be assumed that Wowcher has breached the law – at present, only a court can decide whether a breach has occurred.
- Wowcher will refund over 870,000 customers, with the amount totalling approximately £4,271,000. Affected customers will have the amount they were charged for Wowcher’s VIP membership automatically credited to their Wowcher account by 14 August 2024. They can then request that this amount be converted into cash, should they prefer.
- In November 2023, the CMA published an open letter and compliance advice to UK businesses that sell online. The letter provides examples of claims that the CMA considers breach consumer law, specifically misleading urgency and price reduction claims.
- The key piece of consumer protection legislation relevant to the CMA’s investigation, is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs). The CPRs contain a general prohibition against unfair commercial practices and specific prohibitions against misleading actions and misleading omissions.
- The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs) are also relevant to the CMA’s investigation. The CCRs require businesses to provide consumers with certain prescribed information before they enter into contracts (and in some cases again once the contract is concluded) – such as information about the main characteristics of the goods or service, and the business’ details. The CCRs also give consumers certain rights to cancel a contract they entered into online and get a refund; and prevent traders from using ‘pre-ticked’ boxes to obtain a consumer’s agreement to make additional payments.
- Parliament recently passed legislation to give the CMA stronger consumer powers, which will enable the CMA to decide when consumer law has been broken without taking a case to court. The Digital Markets, Competition and Consumers Act 2024 will empower the CMA to fine those firms that do break consumer law up to 10% of their global turnover. The relevant sections of this legislation have not yet been brought into force.
- Media enquiries should be directed to press@cma.gov.uk or 020 3738 6460.
- All enquiries from the general public should be directed to the CMA’s General Enquiries team on general.enquiries@cma.gov.uk or 020 3738 6000.