The US Federal Trade Commission (FTC) will be using the $4.2 million that Fashion Nova paid to settle charges—that the company misled customers by blocking negative reviews on its website—to provide refunds to customers.
- According to the FTC, Fashion Nova did not 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.
The Refunds: Individuals can apply for a refund if they meet all four requirements: (i) They bought products from FashionNova.com before 21 November 2019; (ii) their purchase decisions were influenced by customer reviews and ratings; (iii) they were not satisfied with the products; and, (iv) they have not already received a refund for the products.
- If individuals meet these four requirements, they can apply for a refund, even if they got money earlier from a different Fashion Nova settlement.
- The deadline to file a claim is 15 August 2023.
The Case: Online fashion retailer Fashion Nova, LLC in January 2022 was prohibited from suppressing customer reviews of its products and required to pay $4.2 million to settle FTC allegations that the company blocked negative reviews of its products from being posted to its website.
- The FTC alleged in a complaint that the California-based retailer, which primarily sells its “fast fashion” products online, 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.
- 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.
- But from late-2015 until November 2019, 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, FTC had said.
- This was the second case the FTC had brought against Fashion Nova. 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.
