On 19 July 2024, the Competition and Markets Authority (CMA) announced that Wowcher, an e-commerce site, has agreed to revise its online selling practices and issue over £4 million in refunds.

CMA's investigation

In March 2023, the CMA began investigating Wowcher's use of "urgency claims", such as countdown timers and marketing claims like “In High Demand” that can pressure consumers into making quick purchasing decisions. The Consumer Protection from Unfair Trading Regulations 2008 contains a general prohibition against unfair commercial practices and specific prohibitions against misleading actions and misleading omissions. In particular, it is an automatic breach falsely to state that a product is available for a very limited time to elicit an immediate decision, depriving consumers of sufficient opportunity to make informed choices.

 Hidden charges and pre-ticked boxes enrolling Wowcher's consumers into VIP memberships, leading to unintended purchases, were also central to the CMA's decision. The CMA considered the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs) here. These require businesses to provide consumers with certain prescribed information before they enter into contracts (and in some cases again once the contract is concluded) – such as information about the main characteristics of the goods or service, and the business’ details. They also give consumers certain rights to cancel a contract they entered into online and get a refund, and prevent traders from using ‘pre-ticked’ boxes to obtain a consumer’s agreement to make additional payments.

In November 2023, the CMA issued a warning to Wowcher, stating that failure to change could risk court action.

Outcome

According to the CMA, Wowcher has committed to:

• Clear and accurate countdown timers: timers must not mislead consumers or create false urgency. Wowcher also undertook to remove the permanent countdown timer on its homepage, which counts down to midnight, suggesting those deals may end.
• Accurate and clear marketing claims: claims about scarcity and popularity must accurately reflect stock levels and sales data respectively. 
• "VIP membership" refunds: Wowcher promised to issue refunds to over 870,000 customers who were signed up via pre-ticked boxes, totalling roughly to £4 million, and to stop using pre-ticked boxes for VIP sign-ups.

Next steps

The Wowcher investigation forms part of the CMA’s broader effort focussing on online choice architecture (OCA) (we previously wrote about OCA here). Its initiatives include publishing a research paper (April 2022), open letter (March 2023), and joint paper with ICO (August 2023), on OCA, and investigating the Emma Group. 

While the CMA currently cannot directly impose fines for breaches of consumer protection law, the Digital Markets, Competition, and Consumers Act 2024, once in effect, will enable the CMA to directly decide on consumer protection infringements and impose fines. Given the CMA’s focus on OCA practices, it is expected to fully utilise its new enforcement powers once the Act is in force.

The Wowcher outcome underscores the importance of transparent and fair online selling practices, in particular, reviewing urgency claims, marketing strategies, and sign-up processes to ensure regulatory compliance and maintain consumer trust.