Wayfair among firms hit with £6m fine for ‘misleading’ sales tactics
Online retail giant Wayfair is among three firms fined £6m by the competition watchdog for misleading sales tactics.
The Competition and Markets Authority (CMA) said on Wednesday it fined Wayfair £4.8m for misleading customers with false limited-time offers that did not end when they said they would.
This follows an investigation in which the CMA found products were advertised on Wayfair’s website through ‘Daily Deals’ and 24-hour ‘Flash Deals’, alongside messages such as ‘Here Today, Gone Tomorrow’ and countdown timers.
The competition watchdog’s probe found that many products remained available at the same price or lower after the stated deadline, meaning the time-limited offer was false.
“By stating these were one-day offers, people could have felt pressure to make a quick purchase so as not to lose out,” the CMA said.
Alongside Wayfair, the CMA fined home appliance retailer Appliances Direct £1.2m and ordered it to refund customers about £432,000, and City-based gym group Gold’s Gym, which was hit with a £45,000 fine and ordered to refund customers about £9,000.
The watchdog fined Appliance’s Direct for misleading time-limited offers, while it found Gold’s Gym failed to clearly list the total membership price, including the joining fee.
The chief executive of the appliance firm’s parent company, Buy It Direct Group, Nick Glynne, said in a post on LinkedIn the fine comes as “we fight the battle of our lives against an unprecedented wave of competition from Chinese traders, alongside rising employment costs, taxes and regulation.”
“Our controls were not adequate. But is this fine proportionate to the harm? In comparison, the average fine for corporate manslaughter is around £500,000,” Glynne said.
The competition watchdog said “all three parties engaged constructively with the CMA” and “admitted to breaking the law and agreeing to settle the case early with the CMA”, so they received a 40 per cent reduction in their fine.
“Whether buying a new sofa, a washing machine, or joining a gym, people should see genuine, accurate prices and offers – and decide for themselves whether they want optional extras. At a time when many households are carefully managing their budgets, people shouldn’t lose out because of misleading sales tactics,” Hayley Fletcher, senior director for consumer protection at the CMA, said.
“The time is up for this kind of behaviour. Businesses must treat their customers fairly and make sure they comply with the law, or risk hefty fines,” she added.
A Wayfair spokesperson said in a statement: “Although we believe the fine is excessive and disproportionate, we take the CMA’s findings seriously and we chose to settle so we can continue to focus on serving our customers.”
Gold’s Gym was contacted for comment.