Fashion Nova Ordered To Pay $4 Million by FTC For Hiding Reviews Under 4 Stars
Fast fashion company Fashion Nova has been ordered to pay $4.2 million in a settlement order by the FTC (Federal Trade Commission) for failing to display reviews that were left for them that were under four stars. Reviews play a crucial role in eCommerce and when a retailer deliberately tries to mislead customers it can come back to bite them if they get found out.
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The Fashion Nova Review Scandal
Like many online retailers, Fashion Nova utilized a third-party tool to help them manage and display their reviews. The problem arose however between 2015 to 2019, when they had 4 and 5-star reviews appear automatically on the site. They then had the rule that anything lower than that would require approval. This isn’t an uncommon practice as it allows the retailer to rectify any issues that a customer has had and try and make the shipping experience better. The issue with Fashion Nova however is that they just left hundreds of thousands of reviews requiring approval. Which means artificially inflating the perceived quality of the goods on the site.
“Fashion Nova misrepresented that the reviews on its website accurately reflected the views of all purchasers who submitted reviews to the website. The proposed settlement puts provisions in place to address Fashion Nova’s deceptive practice and orders Fashion Nova to pay $4.2 million for harm consumers incurred,”FTC Statement
You can see the full case filed by the FTC here.
Whilst Fashion Nova is claiming that this was all an innocent accident in their defense of the accusations this isn’t the first time that the fashion company has come under scrutiny from the law regarding their operating practices. Back in 2020, they were also ordered to pay $9 million due to numerous violations regarding shipping and refunds.
Fake or misleading reviews continue to be a plague for all of eCommerce as even marketplace giants like Amazon continue to battle against sellers using fake reviews and potential shoppers are still reluctant to fully trust those reviews that they see. As it stands there is still no clear solution for the reviews problem when it comes to eCommerce.
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Dave is a Co-Founder of eSeller365. For over 10 years he has been involved with eCommerce with a particular interest in the marketplaces and the huge opportunities available for sellers when utilizing a multi-channel strategy. After a year of being the UK’s youngest eCommerce consultant, he built an education platform called UnderstandingE that showed the world how to utilize Magento as the “Third Generation of Multi-Channel software”.
Dave has also created a YouTube channel dedicated to entrepreneurship and eCommerce as well as a podcast dedicated to mental health awareness. When Dave isn’t working his main interests include learning and playing Chess, researching the Crypto and NFT space, and trying to find the nearest beach.