The Federal Trade Commission has made a notable announcement regarding the issuance of refunds to select Fashion Nova customers following revelations of deceptive practices within the popular fast fashion retailer. As detailed in a press release dated Jan. 28, the FTC disclosed its plan to distribute nearly $2.4 million to impacted consumers as part of a formal settlement agreement. The regulatory body accused Fashion Nova of engaging in misleading conduct by manipulating product reviews on its website.
The FTC asserted that Fashion Nova had engaged in the unjust practice of suppressing negative reviews, leading customers to believe that the displayed feedback accurately represented all submitted reviews. In reality, the retailer was discovered to have withheld reviews rating below four stars out of five. Notably, this case marks the first instance in which efforts to conceal unfavorable customer feedback have been brought to light.
In terms of the refund process, the FTC has outlined that over 148,000 customers who have filed valid claims will receive refunds either through checks or PayPal payments. Recipients of checks are advised to cash them within 90 days, while those receiving PayPal payments should redeem them within 30 days. Furthermore, Fashion Nova has consented to a settlement order that prohibits the suppression of customer reviews moving forward.
Eligibility for refunds extends to customers who made purchases from Fashion Nova preceding Nov. 21, 2019, and submitted a valid claim to the FTC before Aug. 15, 2023. The FTC’s original complaint from January 2022, obtained by USA TODAY, highlighted Fashion Nova’s systematic manipulation of reviews over a significant period.
According to the complaint, dating back to late 2015 until mid-November 2019, Fashion Nova selectively published positive reviews on its website while withholding hundreds of thousands of negative reviews with lower ratings. This practice misled consumers by presenting a skewed representation of the company’s products. The FTC identified multiple instances where negative reviews were suppressed to create a false impression of the product quality.
Fashion Nova, founded in 2006 by current CEO Richard Saghian, operates an online platform in addition to five retail locations in Southern California. The company launched its online store in 2013, which has since become a primary shopping destination for customers worldwide. Despite the allegations and settlement, Fashion Nova has yet to provide a response to USA TODAY’s request for comment.
Fernando Cervantes Jr., a prominent news reporter for USA TODAY, can be reached at fernando.cervantes@gannett.com. For more updates, follow him on X @fern_cerv_. This article, originally published on USA TODAY, details the FTC’s decision to refund Fashion Nova customers a total of $2.4 million in response to the review manipulation scandal.
