Groupon Class Action Targets Sale of PeggyBank Vouchers

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The global e-commerce marketplace Groupon has been hit with a proposed class action lawsuit over its allegedly deceptive marketing practice involving the sale of PeggyBank vouchers.

Groupon is a website that connects consumers with businesses who are offering products or services at a deeply discounted rate.

Throughout 2013, 2014, and into 2015, Groupon advertised and marketed PeggyBank’s services, thereby selling to thousands of customers discount Groupon vouchers for PeggyBank’s digital media conversion services.

Lead plaintiff James Miller, a resident of Ohio, says he purchased two Groupon vouchers in March 2014 for a discounted video and image digitization services from PeggyBank. Miller claims to have paid $29 for each voucher with the face value of $200 in services.

According to Miller, he boxed up 65 reels of film and family memories and shipped them to PeggyBank, believing it would take an estimated 12 to 14 weeks to complete the order. Shortly after, he allegedly received an invoice from PeggyBank indicating that he owed an additional $544.34 over and above the $400 face value of the two Groupon vouchers he purchased, which he paid.

Five months later, he still had not received the materials and was informed by PeggyBank that, due to a recent Groupon promotion, PeggyBank was experiencing a significant back up in production, but that processing nevertheless should take an additional 12-14 weeks.

Now, it has been more than a year and a half since Miller placed his Groupon order with PeggyBank and although some of the reels of film he sent have been digitized, he claims that he has not received the entire order for which he paid. Miller says that he has followed up with PeggyBank on numerous occasions but he and future Class Members have endured continuous delays and stall tactics from all the defendants involved.

The class action lawsuit also claims that even with the Groupon voucher deal, customers were routinely charged additional amounts, frequently hundreds of dollars or more for processing, and an additional amount for the shipping to return the originals to the owners. Payment in full had to be made to PeggyBank before any orders could begin to be processed, the lawsuit states.

Beginning in early 2014, dissatisfied PeggyBank customers began complaining to Groupon about their experience with the company. Still, Groupon allegedly continued the sale of the PeggyBank vouchers.

“Through all of 2014, Groupon continued to sell the Groupon vouchers for PeggyBank…[and] continued to advertise and solicit new orders, accepting payments from customers for services [they] knew, or should have known, PeggyBank was unable to, and did not intend to provide,” the lawsuit states.

According to the Groupon PeggyBank complaint, the company has not honored promised delivery dates and multiple contact attempts have gone unanswered via phone and email.

“No one answered the telephone listed for PeggyBank. E-mails sent to PeggyBank went unanswered, with the exception of an automated response telling customers that reply times may be long but ‘one of the team members will get back to you as soon as possible’ and that ‘SENDING MULTIPLE E-MAILS WILL RESET YOUR POSITION IN THE SUPPORT QUEUE TO THE END OF THE LINE’,” the lawsuit contends.

In September 2014, PeggyBank merged with ScanDigital and indicated they moved to California. However, the lawsuit states that two investigative reporters tracked down ScanDigital in Indianapolis where the exact connection of the two companies remains unclear.

A year later, PeggyBank allegedly sent a letter to some customers stating that because many customers “have been waiting up to 15 months for their order, we have made the difficult decision to close our doors for good and shut down PeggyBank.”

No refund was offered for the upfront payments made by customers, however ScanDigital “offered” to help by agreeing to honor the face value of $29 for outstanding Groupon vouchers.

During this time, Groupon was still allegedly selling PeggyBank vouchers, even though they knew the company had merged with ScanDigital or was sold to, or closed.

Miller is seeking multi-state certification for a Class of consumers were victims of Groupon’s alleged deceptive pattern of conduct and participation in selling vouchers for services it knew or should have known were not going to be provided to customers and yet received payments for those vouchers over the course of several years.

The proposed Class brings forth claims for actual, punitive, and statutory damages as provided by the Ohio Consumer Sales Practices Act and various state fraud statutes against Groupon, PeggyBank, and other named defendants.

Miller is represented by Dennis E. Murray and Donna Jean Evans of Murray & Murray Co., L.P.A.

The Groupon PeggyBank Voucher Class Action Lawsuit is Miller v. PeggyBank, et al., Case No. 1:16-cv-01011 in the U.S. District Court for the Northern District of Ohio, Eastern Division.