(Filed Under wholesale Lingerie News). Fashion Nova, the fashion retailer, has been hit with another big fine by the Federal Trade Commission, this for the second time in less than two years.
According to the FTC, the retailer, which operates an online shop as well as five brick and mortar locations in California, blocked negative reviews of products online “from late-2015 until November 2019.”
The FTC announced, “Fashion Nova, LLC will be prohibited from suppressing customer reviews of its products and required to pay $4.2 million to settle” the complaint. It added that the retailer “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. The case is the FTC’s first involving a company’s efforts to conceal negative customer reviews.”
Wrote Samuel Levine, director of the FTC’s Bureau of Consumer Protection, “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.”
The FTC explained that “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,” adding “Fashion Nova never approved or posted the hundreds of thousands of lower-starred, more negative reviews. Suppressing a product’s negative reviews deprives consumers of potentially useful information and artificially inflates the product’s average star rating.”
The FTC added 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. 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.”
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.”
The FTC concluded that “under the proposed settlement of the latest allegations, Fashion Nova will pay $4.2 million for harm consumers incurred. Fashion Nova will also be prohibited from making misrepresentations about any customer reviews or other endorsements. In addition, it must 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.”
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