Retailer Fashion Nova To Pay US$ 4.2 Million In Settlement With FTC

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Online fashion retailer Fashion Nova will be required to pay US$ 4.2 million to settle allegations that it blocked negative reviews of its products from being posted to its website, according to the US Federal Trade Commission.

The agency said in a complaint that the retailer, which is based in Vernon, misrepresented that the product reviews on its website were reflective of the views of all purchasers who submitted reviews, when in fact it suppressed reviews with ratings lower than four stars out of five.

It said that from late 2015 until November 2019, Fashion Nova used a third-party review system that never approved or posted the hundreds of thousands of lower-starred, more negative reviews. Fashion Nova called the agency’s allegations “inaccurate and deceptive.” It said it never suppressed any website reviews, and 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 company said in a statement e-mailed to the Associated Press.

The FTC said this was the agency’s first case involving a company’s efforts to hide negative customer reviews. “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.”

The FTC also said that it’s sending letters to 10 companies, which it didn’t identify, offering “review management services.” It said the action serves as a warning that avoiding the collection or publication of negative reviews violates the Federal Trade Commission Act.

Fashion Nova specialises in fast fashion pushed by a legion of online influencers as well as celebrities. Rapper Cardi B’s second Fashion Nova collection reportedly racked up more than US$ 1 million in sales within 24 hours of its spring 2019 debut, according to TMZ.

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