Fashion Nova fined $4.2 million for blocking bad reviews


Fashion Nova, the popular fashion retailer, has found out the hard that you simply don’t block criticism that you don’t like.

Many of us prefer to have flattering descriptions of ourselves on the internet. However, you have to be more transparent when it comes to running a business. The US Federal Trade Commission drove the importance of truthfulness home when it levied a fine of $4.2 million on Fashion Nova, a popular fashion retailer based in California. The company had engaged in actively suppressing negative customer reviews on its website.

This marks the first time the FTC will go after a company engaging in this act.

The FTC complaint that Fashion Nova employed a third-party tool that sifted out four and five-star reviews and posted them, cutting out hundreds of thousands of lower stars and negative reviews, thereby misleading customers.

According to the FTC, Fashion Nova’s action was harmful because “suppressing a product’s negative reviews deprives consumers of potentially useful information and artificially inflates the product’s average star rating.”

In addition to the step taken against Fashion Nova, the FTC has also “announced 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.”

Apart from the fine, 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.”

However, the complaint resolution did not require the fashion retailer to admit to engaging in any malpractice.

In response to The Verge, Fashion Nova spokesperson Terry Fahn said the “allegations against Fashion Nova are inaccurate and deceptive.” The company never suppressed any website reviews, and Fashion Nova “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.”

Fahn said the misunderstanding resulted from Fashion Nova relying on third-party software to publish star ratings automatically. Also, the company unintentionally failed to post the reviews that the software flagged for manual review, due to “certain resource constraints during a period of rapid growth.”

This is actually the second case involving Fashion Nova that resulted in a fine. In April 2020, Fashion Nova agreed to pay $9.3 million to settle allegations that the company failed to correctly notify consumers and give them the chance to cancel their orders when it failed to ship merchandise on time and that it illegally used gift cards to compensate consumers for unshipped merchandise instead of issuing refunds.

Written by HackerVibes

Microsoft earned $18.8 billion on $51.7 billion revenue in last quarter of 2021

IMF asks El Salvador to abandon the idea of using bitcoin as legal tender