The Competition and Markets Authority (CMA) has today announced that Wowcher will change the way it promotes products and services to customers – as well as providing over £4 million in refunds.

Background

We’ve written a lot about “online choice architecture” (OCA) and so-called “dark patterns”, where websites and apps “nudge” customers into making decisions that they perhaps might not have made. Examples include countdown timers, where you’re told you have less than 10 minutes to make a decision when in fact that isn’t completely true, or popularity claims such as banners that say “10 people have bought this item today” when, again, this isn’t entirely true or gives a misleading impression.

Wowcher investigation

The CMA has been working in this area for some time. It has been investigating Wowcher over concerns that Wowcher’s countdown timers and marketing claims, such as “Running out!” and “In high demand!”, may create a false sense of urgency and influence people’s purchasing decisions. 

The CMA is concerned that such “urgency” claims risk giving the misleading impression that products shortly won’t be available, when this is often not the case. These claims, particularly when used with countdown timers, may pressure shoppers to buy quickly for fear they’ll miss out – potentially leading to rushed purchases or people spending more than they planned to bag a perceived bargain. In particular, the CMA was concerned that most products on Wowcher’s site continued to be available at a similar price once the daily countdown timer had ended. The CMA was also concerned about Wowcher’s use of pre-ticked boxes to sign thousands of customers up to its paid-for ‘VIP membership’, which risked customers being signed up without their full understanding.   

In November 2023, the CMA wrote to Wowcher setting out its concerns. It said Wowcher needed to change its practices or else risk possible court action. 

Investigation outcome

The CMA has now announced that Wowcher has agreed to provide undertakings that it will:

• only use clear and accurate countdown timers: Timers must not mislead consumers or give a false impression that they must act quickly to avoid missing out on a deal. Wowcher will also remove its permanent countdown timer at the top of its homepage which states “Deals refresh in*: XX:XX:XX:XX” and counts down to midnight, suggesting those deals may then change or end.
• make sure all marketing claims are clear and accurate: Claims about the scarcity of a deal – e.g. “Almost gone – only 2 remaining!” must accurately reflect Wowcher’s remaining stock levels, among other things. Claims about the popularity of a deal such as “In high demand!” must accurately reflect Wowcher’s sales figures, as well as how popular a deal is compared to other similar deals.
• refund customers who were signed up to “VIP membership” via a pre-ticked box: Wowcher will provide a credit refund (with the option to exchange to cash) to over 870,000 customers and will stop the use of pre-ticked boxes for VIP sign-ups, to ensure customers are fully aware of what they are agreeing to. Based on the information Wowcher has provided, the CMA expects refunds for those affected will total over £4 million. It has now announced that Wowcher has agreed to provide undertakings that it will change its website.

To ensure Wowcher is complying with the commitments it signed, the firm must regularly report back to the CMA over the coming year.

Where next?

The investigation into Wowcher forms part of a wider programme of consumer enforcement action focused on OCA. The CMA’s ongoing investigations into Emma Sleep and Simba Sleep are also part of this programme. 

In May 2024, the Digital Markets, Competition and Consumers Act 2024 received Royal Assent, and the CMA has wasted no time in reminding people that it will have wider enforcement powers under the Act, once the relevant sections come into force. The Act also restates (with some changes) the rules on unfair commercial practices in the Consumer Protection from Unfair Trading Regulations 2008. As a result, if you deal with consumers, you need to review your sales practices carefully to ensure they do not fall foul of the rules and risk an eye-watering fine.