Retailer Fashion Nova just got slapped with a $4.2 million fine by the Federal Trade Commission (FTC) for paying an outside firm to promote positive reviews on behalf of the $450 million company. Allegedly, all negative reviews were reported to have been suppressed until they were cleared by Fashion Nova first. This case of dubious reputation management is the first of its kind for the commission.
“Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Fashion Nova is being held accountable for these practices, and other firms should take note.”
On its official Twitter page, the commission gave further explanation of its case against the company. “Fashion Nova used a third-party online product review management interface to automatically post four- and five-star reviews to its website and hold lower-starred reviews for the company’s approval,” posted the FTC.
Fashion Nova doesn’t agree with the FTC’s findings, chalking it up to a fault of the third-party’s software. Terry Fahn, a senior exec for Sitrick & Co. and spokesperson for Fashion Nova, said the allegations were “inaccurate” and that his client’s error was in relying on the outside company’s “autopublish” feature instead of reviewing how it worked.
Fahn was also “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.”
However, this is not the first time that the company has been accused of shady business practices. Nearly a year-and-a-half ago, the FTC ordered Fashion Nova to pay a $9.3 million fine for misleading customers about shipping times and flat out not refunding payments for unshipped merchandise.
Around the same time, the L.A.-based Garment Workers Center attacked the brand for how it handled wages and layoff at the start of pandemic. “The company told us that [they] were going to close down for the coronavirus,” said then 19-year-old Paulina Miguel to Remake. “They told us they were going to close down and not open it until April 20th. But we just heard that the company didn’t really close, they just told that to some of the workers.”
GWC director Marissa Nuncio said she was aware of the rampant wage theft and underpayment per a 2019 Department of Labor investigation, and it predominantly affected the (female dominated) Latinx and Asian immigrant worker population companies like Fashion Nova prefer to hire. “We know from our ongoing work that Fashion Nova has been a bad actor for quite some time,” she said, “and we’ve seen terrible wages in their supply chain for quite some time.”