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Fashion Nova to Pay FTC $4.2 Million Settlement for Blocking Negative Reviews

Fashion Nova campaign.
Fashion Nova campaign. (Fashion Nova)

The fast fashion brand will pay $4.2 million to the American Federal Trade Commission to resolve a complaint that the company was suppressing reviews that were less than five stars on its site.

”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.”

According to the FTC, Fashion Nova uses a third-party company to manage reviews, which automatically posts four and five-star ratings of its products. From the end of 2015 through November 2019, the company declined to approve and post reviews that were below four stars, an action which the FTC said “deprives consumers of potentially useful information and artificially inflates the product’s average star rating.”

With the settlement, the FTC said Fashion Nova must publish all customer reviews, regardless of their ratings. The agency sent letters to 10 companies that offer customer review management and published updated guidelines for online retailers on publishing reviews from customers.

In a statement sent to BoF, Fashion Nova called the allegations “inaccurate and deceptive,” saying that the company “immediately and voluntarily addressed the website review issues when it became aware of them,” which it says was back in 2019. The company, it said, is “highly confident” it would have “won in court” and said it agreed to settle to avoid the legal fees and associated hubbub of prolonged litigation.

“The issue in this case was caused by Fashion Nova’s reliance on a reputable third-party enterprise software vendor, which offered an option to “autopublish” various star ratings in a drop-down menu,” the statement continued. “Those that were not autopublished were filtered and could be individually reviewed and manually released. At one point in time, the company inadvertently failed to complete this process given certain resource constraints during a period of rapid growth. That issue was remedied several years ago and all previously unpublished reviews have now been posted to the extent they are actually about the product they were submitted for and do not contain profanity, do not contain threatening language and comply with other reasonable terms.”

“Fashion Nova continues to be an entrepreneurial led company solely focused on providing a great assortment of fashionable clothes at very affordable prices,” the statement ends. “It prides itself on knowing that 80% of its business comes from repeat customers and does its best to listen carefully to customer feedback every day and keep getting better in everything that it does.”

The FTC previously fined Fashion Nova in April 2020 for not giving customers enough notice to cancel orders when merchandised shipped late. The label was also illegally compensating shoppers with gift cards instead of issuing refunds.

Online reviews influence nearly $98.4 billion in online fashion spend, according to a study released last summer by AI company Cheq and the Univesity of Baltimore.

Editor’s Note: This article was revised on 26 January, 2022. A previous version of this story stated that the FTC had fined Fashion Nova $4.2 million. The payment was not a fine, it was made as part of Fashion Nova’s settlement with the FTC.

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The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
The State of Fashion: Technology
© 2022 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.
The State of Fashion: Technology