(ABC4) – California-based online retailer Fashion Nova will have to pay $4.2 million as part of a settlement of allegations related to blocking negative reviews of its products.
The settlement is part of claims made by the Federal Trade Commission (FTC) alleging that Fashion Nova blocked negative reviews of its products from being posted to its website from as early as late 2015 through mid-November 2019.
This is the second time Fashion Nova has had to go head-to-head with the FTC. In April 2020, the FTC announced that Fashion Nova would have 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 the company failed to ship merchandise in a timely manner.
The new lawsuit claims Fashion Nova installed a third-party online review management interface that allowed users to choose to have certain reviews automatically post based upon the star ratings while holding lower starred reviews for client approval prior to posting.
From 2015 to 2019, the online retailer chose to have four and five-star reviews automatically posted to the website, but did not approve or publish “hundreds of thousands lower-starred, more negative reviews.”
According to the lawsuit, the FTC says Fashion Nova led its purchasers to believe that the product reviews on the website accurately reflected the views of all purchasers who submitted reviews to its website.
Fashion Nova has also provided a company statement on the FTC’s allegations:
“The Federal Trade Commission’s allegations against Fashion Nova are inaccurate and deceptive. Fashion Nova never suppressed any website reviews, and it immediately and voluntarily addressed the website review issues when it became aware of them 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 issue, in this case, was caused by Fashion Nova’s reliance on a reputable third-party enterprise software vendor, which offered an option to “auto-publish” various star ratings in a drop-down menu. Those that were not auto-published were filtered and could be individually reviewed 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. That issue was remedied several years ago and all previously unpublished reviews have now been posted to the extent they are actually about the product they were submitted for and do not contain profanity, do not contain threatening language, and comply with other reasonable terms.
Fashion Nova continues to be an entrepreneurial-led company solely focused on providing a great assortment of fashionable clothes at very affordable prices. 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.”
The FTC also announced that it will be 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.
In addition, the FTC has released new guidanceforonline retailersandreview platformsto educate them on the agency’s key principles for collecting and publishing customer reviews in ways that do not mislead consumers.
The proposed settlement is forcing Fashion Nova to pay $4.2 million for harm consumers incurred.
Fashion Nova will also be prohibited from making misrepresentations about any customer reviews or other endorsem*nts. It must also post on its website all customer reviews of products currently being sold—with the exception of reviews that contain obscene, sexually explicit, racist, or unlawful content and reviews that are unrelated to the product or customer services like shipping or returns.
FAQs
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.
How do I get my Fashion Nova refund lawsuit? ›
Consumers can apply online at www.ftc.gov/FashionNova. Consumers who have questions about the process can call the claims administrator at 855-678-0018 or email info@FashionNovaClaims.com . The FTC will review and validate claims. Payment amounts will depend on several factors, including how many people file claims.
What is the Fashion Nova review lawsuit? ›
Fashion Nova paid $4.2 million to settle FTC charges that the company once blocked negative reviews on its website and ended up misleading customers by giving the impression no one had big complaints. The FTC is now using that money to provide refunds.
What's going on with Fashion Nova? ›
What was the lawsuit about? According to the FTC, Fashion Nova didn't publish hundreds of thousands of negative reviews about its products and made average star ratings look better by excluding reviews with less than four stars.
Who is the billionaire CEO of Fashion Nova? ›
Richard Saghian is best known as the founder and CEO of fast-fashion company Fashion Nova, but he's also racked up some record-breaking real estate.
Is Fashion Nova refunding money? ›
Fashion Nova issues refunds to the original form of payment used on an order in the event that your order: Is canceled by Fashion Nova. One or more of your items sold out since your order was processed. Item(s) proved to be received damaged, defective, or incorrect.
Why did Fashion Nova get sued? ›
The FTC filed an investigation against Fashion Nova, arguing the online clothing retailer suppressed lower ratings and negative reviews in order to make its products more attractive to buyers. The website allegedly did not publish reviews with three stars or fewer.
Has Fashion Nova ever been sued? ›
After over thirty vendors acceded to Fashion Nova's demands, Honey Bum sued Fashion Nova alleging that it had organized a group boycott that is per se unlawful pursuant to the Sherman Act, 15 U.S.C.
Is Fashion Nova Chinese owned? ›
Fashion Nova is an American fast fashion retail company. The company primarily operates online, but it also has five brick-and-mortar locations. Fashion Nova is known to use affiliate marketing, particularly on Instagram.
Who is suing Fashion Nova? ›
Dembiczak initiated this putative class action in March 2023, seeking relief on behalf of herself and other customers who purchased Fashion Nova products. Dkt.
Fashion mogul Richard Saghian made headlines recently after making a splashy purchase of US$141 million for a mega mansion called The One in the posh Bel-Air area at an auction. The CEO of privately-owned retailer Fashion Nova is a familiar name to fashion lovers everywhere.
Are Shein and Fashion Nova the same company? ›
The Short Answer: No, They're Not the Same
Fashion Nova and SHEIN are two distinct brands in the fast-moving world of online fashion.
How much do Fashion Nova girls make? ›
Average Fashion Nova Model monthly pay in the United States is approximately $15,718, which is 326% above the national average.
Where do Fashion Nova get their clothes from? ›
So, with that being said, if you're wondering where gets clothes from, the answer to your question is often “Fashion Nova is the vendor.” And on the occasions where they aren't the vendor, they've gotten their styles from various wholesale vendors located in the Fashion District.
Who is the owner of Shein? ›
Shein, Global Fashion Manufacturer, Will Go Public In 2024
The company is currently owned by Sky Xu, also known as Chris Xu in the International English media.
Who is the youngest billionaire in the fashion industry? ›
n mid-November, Kylie Jenner marked a milestone moment with a visit to a strip mall. For the past three years, her Kylie Cosmetics had only sold its makeup online and briefly in pop up shops.
How much are the FTC refund checks? ›
In addition, the FTC sometimes imposes a minimum check amount that excludes some consumers who otherwise would have been eligible. In general, the FTC does not mail checks of less than $10. In 2022, the FTC sent additional payments totaling more than $193 million dollars to consumers in 26 different FTC cases.
