5 Reasons Customers Are Turning Against Groupon

By Diane Bullock

NEW YORK (Minyanville) -- Shame on me. I was fooled -- not once, not twice -- but three times by Groupon(GRPN) . Although I consider myself, by and large, a fairly savvy consumer, it turns out I had a steep learning curve when it came to realizing the extent to which I was being taken by the daily deal behemoth.

As it also turns out, I'm not alone in my buyer's remorse. Not by a long shot. Grumbles about Groupon are reverberating throughout the Web. There's even a dedicated Groupon griping Facebook page.

In the UK, the Advertising Standards Authority got involved and the Office of Fair Trading (or OFT) launched a formal investigation that recently found Groupon in "widespread" breach of consumer protection regulations. The company's Middle East arm has been so "flooded with complaints," it's changed leadership twice in less than six months.

Though the charges leveled against Groupon are numerous and varied, they usually fall into five basic categories.

1. False Advertising

Groupon has certainly achieved a level of trust among consumers, and for good reason. The site claims to have "hundreds of experts" in its employ who "painstakingly research" the businesses with which it partners.

So when a deal for Zaggora Weight-Loss HotPants is featured, customers are more likely to believe Groupon's claim that the "slimming technology...helps drop up to two dress sizes in two weeks" and not liken the product to some kind of "As Seen on TV" scam.