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Scoopon pays $1 million for false and misleading representations in ACCC action

Online deals company Scoopon Pty Ltd (Scoopon) has been ordered to pay $1 million in penalties for making false and misleading representations in the course of business.

The Federal Court ordered the penalties late last year, declaring that Scoopon had contravened the Australian Consumer Law (ACL) in making representations to both businesses and consumers.

False and misleading representations were made to consumers about their refund rights, and to businesses about the costs and risk of running a deal with Scoopon. The Court also declared that there was no reasonable basis for a representation to one business that 30% of vouchers sold would not be redeemed.

An injunction restrains Scoopon and its employees from making similar representations for two years. The company was also ordered to enhance its compliance program and hold an educational seminar on ACL issues for similar companies.

The Australian Competition and Consumer Commission (ACCC) said Scoopon had cooperated in resolving the matter by consent, but warned it would continue to take action in this area.

In a statement, ACCC chairman Rod Sims said that online issues remain a priority for the regulator.

The penalties are a million-dollar reminder to online sellers that ACL compliance is a serious issue.