LivingSocial Faces Groupon-Style Expiration Date Lawsuits

LivingSocial, always No. 2 to Groupon's No. 1, is keeping up with its big competitor in ways it might not want, falling prey to no fewer than five consumer class action suits.

The suits, which were consolidated last week in federal district court in Washington, D.C., where LivingSocial is based, accuse the daily deals site of including illegal expiration dates on its gift certificates -- or coupons, as the daily deals sites prefer to call them.

The lawsuits were filed earlier this year in California, Washington state, Florida and the District of Columbia.  They will now move forward as a single action in D.C. federal court before Judge Ellen Segal Huvelle.

Plaintiffs say LivingSocial violated consumer protection laws that ban expiration dates of less than five years on gift certificates. The suit charges that LivingSocial knew that many of consumers would not use the certificates before the expiration date and would therefore lose their money.

"LivingSocial just doesn't do enough to make sure that consumers are aware of what their rights are, and they're not doing enough to communicate with their merchants," said attorney Christopher Carney, who filed the Washington state suit in February. 

LivingSocial, like Groupon, is expected to argue that its gift certificates are more like coupons.  Coupons can expire too but since they are free, there's no loss to the consumer.

LivingSocial also claims its promotional deals clearly indicate that they must be used within a limited time and are not deceptive.