Fast fashion retailer Fashion Nova is set to settle allegations by the Federal Trade Commission (FTC) which accused the brand of blocking negative reviews of its products on its website.
A complaint filed by the FTC primarily alleged the online retailer was misrepresenting its product reviews as ones submitted by all purchasers, however, it later discovered that reviews lower than four stars out of five were being suppressed.
According to the organisation, it is the first case it has worked on involving a company concealing negative reviews.
The complaint alleges Fashion Nova used a third-party online product review management interface, automatically posting only positive reviews to its website and holding negative reviews for the retailer’s approval. It noted that, since 2015 and until November 2019, Fashion Nova never approved or posted negative reviews.
“Deceptive review practices cheat consumers, undercut honest businesses and pollute online commerce,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement. “Fashion Nova is being held accountable for these practices, and other firms should take note.”
To settle the allegations, Fashion Nova will be required to pay 4.2 million dollars for the harm consumers have incurred. The retailer will also be prohibited from making further misrepresentations regarding customer reviews or other endorsements. It will be mandated to post all customer reviews of products being sold, with the exception of irrelevant or obscene content.
It is the second time the FTC has brought a case against Fashion Nova to the limelight. In April 2020, the organisation revealed the retailer had agreed to pay 9.3 million dollars to settle allegations regarding the company failing to notify consumers in the case of delayed deliveries and illegally using gift cards to compensate consumers for unshipped merchandise instead of providing refunds.
The organisation has also announced that it is sending letters to ten companies offering review management services, placing them on notice for avoiding the publication of negative reviews. It has further released new guidance for online retailers and review platforms, educating them on key principles for collecting and publishing customer reviews in order to not mislead consumers.