The Federal Trade Commission is sending refunds totaling nearly $2.4 million to customers of fast fashion retailer Fashion Nova.
The payments come as part of a settlement with the retailer after federal regulators alleged in 2022 that the company blocked negative reviews from being posted on its website. Fashion Nova, which is relocating its headquarters to Beverly Hills, was accused of claiming that reviews on its site reflected the views of all customers, when it suppressed reviews with ratings lower than four stars out of five.
The FTC said the case against Fashion Nova was the agency’s first involving a company’s efforts to hide negative customer reviews.
In its 2022 complaint, the agency said that from late 2015 until November 2019, Fashion Nova used an outside company to process reviews from customers. That company didn’t post the hundreds of thousands of lower-starred, more negative reviews, the complaint alleged.
Fashion Nova at the time called the agency’s allegations “inaccurate and deceptive.” It said it never instructed the outside company to hold back any website reviews, and claimed it immediately and voluntarily addressed the issue when it became aware of it in 2019.
Checks and PayPal payments will be disbursed to more than 148,000 customers who filed claims that regulators determined to be valid. Recipients should cash their checks within 90 days or redeem their PayPal payments within 30 days, the agency said.
The FTC also has a web page answering frequently asked questions about the refund process.
This is the second case the FTC has brought against Fashion Nova in recent years.
In April 2020, the agency announced that Fashion Nova had agreed to pay $9.3 million to settle allegations that the company failed to properly notify consumers and give them the chance to cancel their orders when it failed to ship merchandise in a timely manner. Fashion Nova also allegedly illegally used gift cards to compensate consumers for products that had not yet been shipped instead of providing refunds.
Although it has a handful of brick-and-mortar stores in Southern California, Fashion Nova has adapted to the rise of e-commerce, launching its online store in 2013 and releasing a shopping app. The privately owned company has annual sales of approximately $2 billion and 40 million followers on social media, according to a previously posted news release about its move to the new office space in Beverly Hills.
The Associated Press contributed to this report.
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