The Competition and Markets Authority (CMA) has fined Wayfair, Appliances Direct and Gold's Gym a total of £6 million for misleading sales tactics. Wayfair was fined £4.8 million for false time-limited offers, Appliances Direct was fined £1.2 million and ordered to refund customers about £432,000, and Gold's Gym was fined £45,000 and ordered to refund customers about £9,000.
Misleading offers and automatic opt-ins
Wayfair and Appliances Direct were fined for misleading customers with time-limited offers that did not end when they said they would. Appliances Direct also automatically opted customers into paid-for extras.
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. However, the CMA found that many products remained available at the same price or lower after the stated deadline, making the time-limited offer false.
Refunds and consumer law
Gold's Gym was fined for not giving the total price for memberships, including the joining fee, in a clear and timely way. Customers of Appliances Direct and Gold's Gym will receive about £440,000 in refunds as a result of the action.
Appliances Direct customers were automatically opted into one or both of services to "Remove & Recycle Your Old Appliance" and "Installation on Delivery service". Under consumer law, businesses must get customers' express agreement before charging them for optional extras, and 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. Appliances Direct must pay about £432,000 in refunds to customers affected by opt-ins, at an average amount of £25 per person.
The CMA found that Gold's Gym 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. Under consumer law, businesses must show customers the total price, including any mandatory fees, clearly and from the outset.
CMA statement and response
The CMA 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. The CMA said both firms would contact affected customers about their refund, and customers do not need to take any action.
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."
A Wayfair spokeswoman said: "Although we believe the fine is excessive and disproportionate, we take the CMA’s findings seriously and we chose to settle so we can continue to focus on serving our customers."
