ACCC takes court action against discount website Spreets

A “breakfast for two” deal run by Spreets was allegedly available at only two or three tables, the consumer cops allege in new court action against the $500m daily deals sector.

Crackdown on daily deals website

IT gives “breakfast for two” a whole new meaning and is partly why discount voucher website Spreets finds itself facing Federal Court action brought by the consumer cops.

While negotiating a “breakfast for two” offer in 2011, Spreets allegedly told a restaurant only two or three tables needed to be allocated on Fridays.

More than 250 consumers bought the deal — without being told about the limitation, the Australian Competition and Consumer Commission said in documents lodged with the court yesterday.

It was a “limitation that, in all the circumstances, consumers would have expected would be disclosed to them by Spreets prior to the consumer purchasing a voucher,” the ACCC said.

It is asking the court to determine whether Spreets engaged in conduct that was misleading or deceptive and therefore a breach of the Australian Consumer Law (ACL).

It is the second such action the ACCC has taken in the past year. In December it secured $1 million in fines against Scoopon.

In this latest case, the ACCC claims Spreets engaged in misleading or deceptive conduct and made false or misleading representations in 2011 and 2012 “about the price of certain deals, consumers’ ability to redeem vouchers, and the applicability of consumer guarantees under the ACL, specifically in relation to consumers’ refund rights”.

At the time, Spreets was one of the major players in Australia’s $500 million-a-year discount voucher industry. But in 2013 it stopped selling its own coupons and began aggregating offers from what had been its competitors. Spreets is owned by Yahoo!7, which bought it in 2011 for about $40 million.

The Documents the ACCC filed with the Federal Court allege Spreets failed to disclose additional costs for skydive deals in Victoria, NSW and Queensland.

The ACCC also said that in a Hong Kong holiday deal, Spreets “represented to each voucher purchaser that he or she had no right to a refund of the purchase price of the voucher in any circumstances” when the purchasers did have a right to a refund in “certain circumstances”. The regulator accuses Spreets of similar behaviour over a storage-system deal and “wine aerator”.

Plus, it says, Spreets did not help consumers who had trouble redeeming valid vouchers with merchants.

One consumer, who was unable to redeem a spa offer, was allegedly told by Spreets: “If you contacting [sic] us with a reasonable time frame to assist you in redeeming your purchase rather than 2 days before the expiratory [sic] date we could of [sic] resolved.”

However, he terms and conditions of the deal made no mention of having to contact Spreets within a “reasonable time prior to the expiry” the ACCC said.

In a statement yesterday, Spreets’ owner Yahoo!7 said it “has been in discussions with the ACCC about these matters for some time and we have already, of our own accord, made substantive changes to the Spreets business model”.

“In part, these changes were to ensure that the Spreets businesses practices protected our users against breaches to consumer law. Beyond this, it is not appropriate for us to comment any further on matters that are before the courts.”

A directions hearing has been set for July 30 in Brisbane.