Fashion Nova Will Pay $4.2 Million To Settle Allegations That It Blocked Bad Reviews On Its Website
It's the first time the Federal Trade Commission has gone after a retailer for failing to provide customers with negative reviews of their products, the agency said.
Fashion Nova has agreed to pay a $4.2 million to settle allegations that it hid bad reviews of its clothing from its website, officials announced Tuesday.
Known for its cheap fast fashion, influencer partnerships, and marketing with a distinct lack of chill, the retailer was accused by the Federal Trade Commission of blocking ratings of its products that were lower than four stars, misrepresenting the reviews. The FTC, an independent government agency, said this is the first time it's gone after a company for failing to provide customers with negative reviews of their products.
“Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce,” Samuel Levine, director of the FTC’s Bureau of Consumer Protection, said in a statement. “Fashion Nova is being held accountable for these practices, and other firms should take note.”
According to the FTC, from late 2015 through November 2019, the Los Angeles–based online retailer never posted hundreds of thousands of bad reviews and ratings of its clothing and accessories. At the time, Fashion Nova was using review management software that automatically posted four- and five-star reviews, but stopped lower-starred ratings from appearing on the site without the company's approval.
In a statement provided to BuzzFeed News, Fashion Nova said the FTC's allegations were "inaccurate and deceptive," saying that it "never suppressed any website reviews" and remedied the issue as soon as it became aware of the problem in 2019.
"Fashion Nova is highly confident that it would have won in court and only agreed to settle the case to avoid the distraction and legal fees that it would incur in litigation," the statement said.
The issue came about because of its reliance on "a reputable third-party enterprise software vendor," the company said. Fashion Nova "inadvertently failed to complete" the screening process for reviews that needed to be evaluated and posted manually "given certain resource constraints during a period of rapid growth," the statement said.
The company said the problem was fixed several years ago and that all of the reviews that were previously not published on its website are now visible, with the exception of those that are off topic or include profanity or threatening language.
The company declined to respond to BuzzFeed News' questions about the third-party vendor and whether it was still using its software.
"Fashion Nova continues to be an entrepreneurial led company solely focused on providing a great assortment of fashionable clothes at very affordable prices," the company said. "It prides itself on knowing that 80% of its business comes from repeat customers and does its best to listen carefully to customer feedback every day and keep getting better in everything that it does."
This isn't the first time Fashion Nova has come under fire by regulators — or the public — for its marketing and business practices. In 2020, the retailer agreed to pay $9.3 million to settle allegations that it had failed to notify customers and give them a chance to cancel their orders when it wasn't able to ship orders in a timely fashion. The settlement also resolved allegations that Fashion Nova had broken federal trade rules when it gave customers gift cards instead of refunds for orders they never received.
Earlier in the pandemic, the company was ridiculed for a "messy" marketing text that told people to spend their COVID stimulus checks on its apparel.
"Fashion Nova is so wrong for this, the stimulus isn’t for shopping its for people who need it during such hard times, this is so ignorant," one Twitter user said.
As part of the settlement announced Tuesday, the retailer will be required to post all customer reviews, unless they are off topic or contain "obscene, sexually explicit, racist, or unlawful content," the FTC said. The commission is also reaching out to companies that offer review management services to put them "on notice" that hiding negative customer reviews violates federal law.