Groupola censured over £99 iPhone deal

The office of Fair Trading has censured an online discountcompany after thousands signed up for a "misleading" iPhone promotion when it had just eight handsets to offer.

Markco Media promoted a sale of the iPhone 4 for just £99, a fifth of the normal retail price, to entice consumers to sign up to the Groupola site shortly after the smartphones went on sale. The heavy publicity around the offer – which the regulator calls "bait pricing" – shortly after the device went on sale prompted 15,000 people to sign up to the daily email alerts.

The company failed to inform those signing up that there were just eight iPhones on offer, leaving almost everybody disappointed, the OFT said. During the promotion, the website's sales progress bar showed that half the iPhone 4s were still available, over a caption stating "202 bought". A spokeswoman for the regulator said it was "obviously misleading".

Following the inquiry, Groupola signed undertakings to prevent a similar situation occuring again. The OFT is monitoring the company in the wake of the ruling, but it stopped offering its own promotions shortly before Christmas and now acts as an aggregator to deals on other sites.

The OFT also found that a Groupola employee had posed as an ordinary consumer and lavished praised on the company on its official Facebook page at the time. The company has agreed not to post employee comments on its social networking sites without making it clear.