Fashion Nova will also be prohibited from making misrepresentations about any customer reviews or other endorsements. Under the proposed settlement of the latest allegations, Fashion Nova will pay $4.2 million for harm consumers incurred. In April 2020, the FTC announced that Fashion Nova agreed to pay $9.3 million to settle allegations that the company failed to properly notify consumers and give them the chance to cancel their orders when it failed to ship merchandise in a timely manner, and that it illegally used gift cards to compensate consumers for unshipped merchandise instead of providing refunds.
This is the second case the FTC has brought against Fashion Nova in recent years. In addition, the FTC has released new guidance for online retailers and review platforms to educate them on the agency’s key principles for collecting and publishing customer reviews in ways that do not mislead consumers. The FTC also announced that it is sending letters to 10 companies offering review management services, placing them on notice that avoiding the collection or publication of negative reviews violates the FTC Act. Suppressing a product’s negative reviews deprives consumers of potentially useful information and artificially inflates the product’s average star rating. But from late-2015 until November 2019, Fashion Nova never approved or posted the hundreds of thousands of lower-starred, more negative reviews. “Fashion Nova is being held accountable for these practices, and other firms should take note.”Īccording to the FTC's complaint, Fashion Nova used a third-party online product review management interface to automatically post four- and five-star reviews to its website and hold lower-starred reviews for the company’s approval. “Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. The case is the FTC’s first involving a company’s efforts to conceal negative customer reviews.
The FTC alleged in a complaint that the California-based retailer, which primarily sells its “fast fashion” products online, misrepresented that the product reviews on its website reflected the views of all purchasers who submitted reviews, when in fact it suppressed reviews with ratings lower than four stars out of five. Online fashion retailer Fashion Nova, LLC will be prohibited from suppressing customer reviews of its products and required to pay $4.2 million to settle Federal Trade Commission allegations that the company blocked negative reviews of its products from being posted to its website.
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