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July 26, 2012 / Admin

Groupon Agrees to Pays $8.5M Settlement


Who doesn’t love a good bargain?  Websites like Groupon and Living Social have become widespread in popularity offering spectacular deals on a multitude of products and services at a fraction of the original cost to cater to the bargain-loving consumer.  Many consumers will check what is being offered on these websites before they purchase anything.   But as great as the deals are, how many of your coupons go to waste because you didn’t redeem it in time?  If this has happened to you, you are definitely not alone.

Groupon, the largest online coupon site has agreed to pay $8.5 million dollars to settle a class action lawsuit alleging that the expiration dates on the coupons are illegal. 17 lawsuits were combined into a class action in the United District Court of San Diego, in which Plaintiffs accused the online coupon giant of violating the Credit Card Accountability Responsibility and Disclosure Act (“CARD Act”) as well as several state consumer protection laws.  Plaintiffs asserted that the CARD Act, which generally applies to gift cards, also applies to daily coupon vouchers and any coupon or voucher that expires in less than five years is in violation of federal law.  Plaintiffs further alleged that Groupon’s marketing scheme created a sense of urgency to buy its vouchers by offering “daily deals” for a limited time. This, Plaintiffs argued, made consumers feel pressured and rushed into buying the vouchers, causing them to become victims of “onerous sales conditions.”

The Groupon settlement requires approval by San Diego Judge Dana Sabraw.  If approved, the settlement will cover consumers who received vouchers between November, 2008 to December 1, 2011. These consumers may redeem the vouchers past the expiration date or recover from the settlement proceeds.





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