The complaint contains one count for violation under Section 5(a) of the FTC Act. Once held back, Fashion Nova never approved or published lower-starred reviews.ĭespite holding back negative customer reviews, the complaint states that Fashion Nova encouraged customers to submit product reviews directly on its product pages and in emails sent to customers following a recent purchase. According to the FTC’s proposed administrative complaint (filed simultaneously with the proposed settlement), the FTC alleges that Fashion Nova used a third-party online product review management interface to automatically post to its website customer reviews that were four stars or higher (on a five-star scale), but hold back for further scrutiny reviews that were three stars or less. On January 25, 2022, the FTC announced that it had settled charges against Fashion Nova, a California-based “fast fashion” apparel company. This edition of Morgan Lewis Retail Did You Know? analyzes the FTC’s charges, and the practical impact it has for retailers that post online customer reviews. Lee said she couldn’t comment on whether that action has progressed in any way, but urged consumers to make a report to the FTC if they notice something about a company that seems fishy.The US Federal Trade Commission (FTC) has settled charges brought against Fashion Nova, LLC (Fashion Nova) under Section 5(a) of the FTC Act for failure to publish negative product reviews on its website. In a January press release, the FTC also announced that it had sent letters to 10 companies that offer review management services warning them about avoiding the collection or publication of negative reviews. “They can also start from referrals we receive from self-regulatory organizations or complaints from consumers, consumer advocacy groups or competitors.” “ can start from our own monitoring of the marketplace or from something that we see or hear in the news,” she says. It also creates an unfairness issue for the online commerce market as a whole if “some companies are being honest and transparent about their reviews and others are doing things to hide or withhold negative reviews,” Lee says.Īlthough she couldn’t comment on how the FTC became aware of this particular case, Lee says the agency generally has a number of ways of discovering information that can lead to an investigation. “So when a company withholds negative reviews or does something to hide those negative reviews, it deprives consumers of the opinions of other purchasers.” “When consumers see a review section on a website, they assume that all reviews are posted,” she says.
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.”Įmploying unfair or deceptive practices that violate the FTC Act in the manner alleged in this case can harm consumers who have come to look at reviews as a source of honest feedback from their peers, says Lee. “At one point in time, the company inadvertently failed to complete this process given certain resource constraints during a period of rapid growth. “Those that were not autopublished were filtered and could be individually reviewed and manually released,” the spokesperson said. The spokesperson went on to say that the issue was caused by Fashion Nova’s reliance on a third-party platform that offered an option to “autopublish” various star ratings in a drop-down menu. In a statement emailed to TIME, a Fashion Nova spokesperson contended that the FTC allegations were “inaccurate and deceptive” and that the company was “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.”
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