Fashion Nova LLC agreed to pay $4.2 million to settle a complaint by the Federal Trade Commission (FTC) over its deceptive business practice related to product reviews posted on its website.
In its complaint, the FTC alleged that Fashion Nova Fashion misrepresented the views of all purchasers who submitted product reviews on its website.
The california-based online fashion retailer allegedly blocked hundreds of thousands of consumers’ negative product reviews (with ratings lower than four stars) on its website from late 2015 to mid-November 2019
Fashion Nova’s practice is deceptive and unfair as it deprives consumers of potentially useful information before purchasing a product. It also artificially increases a product’s average rating. The company violated Section 5 (a) of the FTC Act, according to the consumer protection watchdog.
In a statement, FTC Bureau of Consumer Protection Director Samuel Levine said, “Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce. Fashion Nova is being held accountable for these practices, and other firms should take note.”
In addition to the payment of monetary relief, the FTC required Fashion Nova to post all customer reviews of products for sale on its website, except those containing obscene, sexually explicit, racist, or unlawful content and unrelated to the product or customer services like shipping or returns.
Furthermore, the consumer protection watchdog prohibited the online fashion retailer from misrepresenting costumer reviews or other endorsements.
This is the second time, the FTC filed a complaint against Fashion Nova. In April 2020, the consumer protection watchdog accused the online fashion retailer of failing to properly notify consumers and to give them an opportunity to cancel their orders when it didn’t ship merchandise on time. The FTC also accused it of illegally using gift cards to pay consumers for unshipped merchandise instead of giving refunds. The company agreed to pay $9.3 million to settle these allegations.
Meanwhile, the FTC is sending letters to ten companies offering review management services. The consumer protection watchdog warned these companies that avoiding the collection or publication of negative product reviews is a violation pf the FTC Act.