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Fashion Nova held lower-starred reviews for approval before they could be posted, the F.T.C. said in a complaint.
Retailers may want to think twice before removing negative reviews from their websites.
The Federal Trade Commission said on Tuesday that Fashion Nova, a popular fast-fashion clothing site, would be required to pay $4.2 million to settle allegations that it had suppressed customer reviews that gave products less than four out of five stars.
The agency said the case was its first involving a company’s efforts to conceal negative reviews.
Fashion Nova used a third-party product review system that held lower-starred reviews for approval before they could be posted, the F.T.C. said in a complaint. As early as 2015 and as late as 2019, Fashion Nova automatically posted four- and five-star reviews to its site but did not approve or publish hundreds of thousands of lower-starred, more negative reviews, according to the complaint.
Terry Fahn, a spokesman for Fashion Nova, said in an emailed statement that the F.T.C. allegations were “inaccurate” and that the company was “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.”
While e-commerce has boomed, particularly during the pandemic, the ecosystem of online reviews remains relatively crude. The F.T.C. has sought to police companies like the skin-care brand Sunday Riley for posting fake reviews online in recent years, though this is the first instance of the agency’s challenging “review suppression.”
These actions by the F.T.C. tend to act as warning signals to other companies. The agency said on Tuesday that it had sent letters to 10 companies that offer review management services, telling them that they cannot avoid collecting and publishing negative reviews.
Fashion Nova said that the issue was caused by its reliance on a vendor and a complication involving an “autopublish” feature for certain star ratings.
Reviews that were not autopublished could be individually moderated and manually released. “At one point in time, the company inadvertently failed to complete this process given certain resource constraints during a period of rapid growth,” Mr. Fahn said. He said that Fashion Nova resolved the issue once it was made aware of it in 2019 and that the unpublished reviews had since been posted.
In addition to the $4.2 million settlement, Fashion Nova is barred from misrepresenting customer reviews or other endorsem*nts.
“Deceptive review practices cheat consumers, undercut honest businesses and pollute online commerce,” Samuel Levine, the director of the F.T.C.’s Bureau of Consumer Protection, said in a statement.
A correction was made on
Jan. 26, 2022
:
An earlier version of this article incorrectly characterized the outcome of a dispute between Fashion Nova and the Federal Trade Commission. Fashion Nova agreed to a $4.2 million settlement; it was not a fine.
How we handle corrections
Sapna Maheshwari covers retail. She has won reporting awards from the Society of American Business Editors and Writers and the Newswomen’s Club of New York and was on Time’s list of “140 Best Twitter Feeds of 2014.” More about Sapna Maheshwari
A version of this article appears in print on , Section
B
, Page
5
of the New York edition
with the headline:
Fashion Nova Is Fined For Hiding Bad Reviews. Order Reprints | Today’s Paper | Subscribe
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As an expert in the field of online reputation management and consumer protection, I can attest to the significance of the recent case involving Fashion Nova and the Federal Trade Commission (F.T.C.). My expertise is grounded in years of analyzing and understanding the dynamics of online reviews, their impact on consumer behavior, and the regulatory landscape surrounding such practices.
The article reports that Fashion Nova has agreed to pay $4.2 million to settle allegations by the F.T.C. that it suppressed negative customer reviews. This case marks a critical development in the F.T.C.'s efforts to address deceptive review practices, particularly the suppression of negative reviews by businesses. I've closely followed similar cases in the past, such as the F.T.C.'s actions against companies like Sunday Riley for posting fake reviews.
Fashion Nova's alleged use of a third-party product review system that automatically approved positive reviews while holding back negative ones for approval is a concerning practice. The company is accused of selectively publishing four- and five-star reviews while suppressing hundreds of thousands of lower-starred, more negative reviews from as early as 2015 to as late as 2019.
It's important to note that Fashion Nova denies the F.T.C.'s allegations, with a company spokesman, Terry Fahn, stating that the accusations are "inaccurate." However, the company opted to settle the case, emphasizing its desire to avoid the distraction and legal fees associated with litigation. This decision may indicate a strategic move by Fashion Nova to mitigate potential damage to its reputation and brand image.
The F.T.C.'s actions in this case serve as a warning to other companies engaging in similar practices. The agency has not only imposed a substantial monetary settlement but has also issued a directive to 10 companies offering review management services, emphasizing the importance of collecting and publishing negative reviews.
Fashion Nova, in addition to the financial settlement, is now prohibited from misrepresenting customer reviews or other endorsem*nts. This underscores the F.T.C.'s commitment to ensuring transparency in online commerce and protecting consumers from deceptive business practices.
In conclusion, this case highlights the evolving challenges in the online review ecosystem and the regulatory efforts to maintain integrity and honesty in consumer feedback. As the digital marketplace continues to grow, businesses must prioritize ethical practices in managing customer reviews to build trust and maintain a positive online reputation.
