Retailers may want to think twice before removing negative reviews from their websites.
The Federal Trade Commission said Tuesday that Fashion Nova, a popular fast fashion clothing site, would be required to pay $4.2 million to settle allegations that it removed customer reviews that gave products less than four stars out of five.
The agency said the case was the first to involve a company’s efforts to cover up negative reviews.
Fashion Nova used a third-party product rating system that submitted less-starred reviews for approval before they could be published, the FTC said in a complaint. Beginning in 2015 and continuing through 2019, Fashion Nova automatically posted four- and five-star reviews on its site, but failed to approve or post hundreds of thousands of less-starred and more negative reviews, according to the complaint.
Terry Fahn, a spokesperson for Fashion Nova, said in an emailed statement that the FTC’s allegations were “inaccurate” and that the company was “very confident that it would have won in court and not agreed to settle the case only to avoid the distraction and legal costs it would incur in the event of a dispute.
While e-commerce has exploded, especially during the pandemic, the ecosystem of online reviews remains relatively rudimentary. The FTC has sought to vet companies like skincare brand Sunday Riley for posting fake reviews online in recent years, though it’s the first example of the industry’s tough ‘review suppression’. ‘agency.
These FTC actions tend to serve as warning signals to other companies. The agency said on Tuesday it had sent letters to 10 companies that offer review management services, telling them they could not avoid collecting and posting negative reviews.
Fashion Nova said the issue was due to its reliance on a vendor and a complication involving an “auto-post” feature for certain star ratings.
Reviews that weren’t automatically posted can be individually moderated and posted manually. “At one point, the company inadvertently failed to complete this process given certain resource constraints during a period of rapid growth,” Fahn said. He said Fashion Nova fixed the issue once he was made aware of it in 2019 and the unpublished reviews have since been released.
In addition to the fine, Fashion Nova is prohibited from misrepresenting customer reviews or other endorsements.
“Deceptive review practices mislead consumers, undermine honest businesses, and pollute online commerce,” Samuel Levine, director of the FTC’s Consumer Protection Bureau, said in a statement.