The Competition and Markets Authority (CMA) has fined three businesses £6 million for misleading sales tactics, and customers will be handed back thousands of pounds. Wayfair and Appliances Direct were fined for misleading customers with time-limited offers that did not end when they said they would, and Appliances Direct was also fined for automatically opting customers into paid-for extras. Gold’s Gym was fined for not giving the total price for memberships, including the joining fee, in a clear and timely way.
Appliances Direct and Gold’s Gym will contact affected customers about their refund. Customers do not need to take any action. All three parties engaged constructively with the CMA. Having admitted to breaking the law and agreeing to settle the case early with the CMA, all three businesses received a 40% reduction in their fine.
CMA statement on misleading tactics
Hayley Fletcher, Senior Director for Consumer Protection at the CMA, said: “Whether buying a new sofa, a washing machine, or joining a gym, people should see genuine, accurate prices and offers – and decide for themselves whether they want optional extras. At a time when many households are carefully managing their budgets, people shouldn’t lose out because of misleading sales tactics.
“The time is up for this kind of behaviour. Businesses must treat their customers fairly and make sure they comply with the law – or risk hefty fines.”
Wayfair fined for false time-limited offers
The CMA’s investigation found that products were advertised on Wayfair’s website through ‘Daily Deals’ and 24-hour ‘Flash Deals’, alongside messages such as ‘Here Today, Gone Tomorrow’ and countdown timers, which implied customers needed to act quickly to get the best deal. But the investigation found that many products remained available at the same price or lower after the stated deadline – so the time-limited offer was false.
By stating these were one-day offers, people could have felt pressure to make a quick purchase so as not to lose out. Wayfair must pay a penalty of £4.8 million.
Appliances Direct and Gold’s Gym penalties
The CMA’s investigation found that Appliances Direct customers were automatically opted into one or both of the following services: ‘Remove & Recycle Your Old Appliance’ service, removing the customer’s old appliance at the time of delivery, which is then recycled, and ‘Installation on Delivery service’, installing the new appliance at the time of delivery. Under consumer law, businesses must get customers’ express agreement before charging them for optional extras. Pre-ticked boxes and other forms of automatic opt-in are not allowed.
Appliances Direct also used pop-up countdown banners on some product pages which claimed that discounts of £10 to £25 were available for a limited time, but the CMA found that the same discount codes appeared repeatedly over many days. This meant customers could have been unfairly pressured into buying an appliance. The CMA has fined Appliances Direct £1.2 million and ordered it to pay around £432,000 in refunds to customers affected by opt-ins – with average pay outs being £25 per customer.
The CMA found that Gold’s Gym, a UK franchise that operates 4 gyms in London, failed to include the joining fee in the total price shown to consumers for their annual and Direct Debit memberships, or the total price was shown in a way that was unclear and unlikely to be seen. This practice is illegal. Businesses must show customers the total price, including any mandatory fees, clearly and from the outset.
The CMA has ordered Gold’s Gym to refund a total of £9,220 to the 726 affected customers. The amount repaid to each customer will depend on the type of membership they bought, but it will be either £50 or £10. Gold’s Gym has been fined £45,000.
