KGB Deals has had several ads banned by the Advertising Standards Authority, which has now said it will be keeping a closer eye on similar businesses.
However, sources familiar with the matter have claimed businesses will continue to be cheeky when it comes to promotion on deal sites.
Five ads by the discount website were identified by the watchdog as containing exaggerated claims over possible savings. The watchdog was also ruled that the company had used misleading product images as well as descriptions to accompany the deals.
In its ruling, it warned KGB that it had to “ensure [it] held robust evidence to support savings claims when advertising offers”.
One of the ads that fell short of the ASA was one for a £139 two night stay for two people and a three course meal on the first night at Norwood Hall Hotel. The advert said that this was usually worth £730 meaning people would receive 81 percent off.
The ASA got involved after a member of the public queried whether the claim that the value of the stay was “worth up to £730″ was misleading and could be substantiated.
KGB claimed that the deal was arranged with Norwood Hall Hotel and provided a copy of the signed Merchant Order Form, which specified the details of the deal that were agreed with the merchant, which they said covered the value and discount claims.
The ASA wasn’t haven’t any of it. It noted the advertised prices listed in the merchant’s e-mail were for the next six months and acknowledged that the total was £730, which was the value price listed in the ad.
It pointed out that it had not seen any documentation, such as invoices or receipts, which showed that the room rate and meal had been previously sold at £330 and £70, leading it to rule that the advert was misleading.
It wasn’t just KGB that got into hot water this week.
The watchdog turned its sights on Gumtree, which also got a slap on the wrist for exaggerating the savings that could be made by users taking up a daily deal.
A promotion offering “£7 for Eye Brightening Collyre Bleu Eye Drops” from JD Harris stating the vendor’s normal price was £24.99 was ruled inaccurate because the product generally sold for less than this price.
Deal websites are increasingly becoming a hot topic for the watchdog. Earlier this year it referred Groupon to the Office of Fair Trading for persistent breaches of the advertising codes.
A spokesperson for the ASA said the watchdog would continue to carry on being vigilant when it came to businesses such as these.
The spokesperson told TechEye: “Although advertisers who place high numbers of advertisements or run lots of promotions are naturally more likely to appear in our workload, we are always concerned when advertisers fall below the high standard expected in the Advertising Codes.
“We are keeping a close eye on the burgeoning daily deals sector and, where appropriate, working directly with businesses to help them improve their compliance with the Codes. We will take strong action against advertisers who fail to show a significant improvement in their compliance rate.”
However, a source familiar with the problem claimed that deal websites could have a tough time on their hands as businesses push the boundaries with what they can get away with.
“Businesses know they can get away with making misleading claims to a point here, because they know it will be the deal sites that are hauled up by the ASA,” the source said.
KGB Deals told TechEye: “We have responded to the ASA and have fully investigated the points raised by their adjudications and already put in place new processes for the accuracy of our deal advertising.”