Fashion Nova, which rocketed to Instagram fame with its skintight, celebrity-endorsed apparel, has agreed to pay $4.2 million to settle accusations it stopped bad reviews from being posted about it online.
The company, which built its name on low-cost clothing touted by stars like Cardi B and Megan Thee Stallion, misled customers about its fast-fashion brand by manipulating the reviews on its website, the Federal Trade Commission said. The company disputes the allegations.
According to the FTC complaint, Fashion Nova employed a system that automatically published four- and five-star reviews but held lower-starred reviews back for company approval.
Hundreds of thousands of negative reviews were never posted from 2015 to 2019, the federal agency said.
Suppressing unfavorable reviews "deprives consumers of potentially useful information and artificially inflates the product's average star rating," the agency said.
The case is the first of its kind in the U.S. and could lead to other companies being punished for concealing negative reviews, the FTC said.
"Deceptive review practices cheat consumers, undercut honest businesses, and pollute online commerce," the federal agency's Samuel Levine said. "Fashion Nova is being held accountable for these practices, and other firms should take note."
Company pushes back
Fashion Nova did not intentionally hide reviews and corrected the problem as soon as company officials became aware in 2019, the company said in a statement.
"The Federal Trade Commission’s allegations against Fashion Nova are inaccurate and deceptive," the statement said. "Fashion Nova is 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."
The company said it "inadvertently" failed to publish some reviews during a period of rapid growth when it lacked the resources to manually inspect lower-starred reviews that were held back for additional approval.
"That issue was remedied several years ago and all previously unpublished reviews have now been posted to the extent they are actually about the product they were submitted for and do not contain profanity, do not contain threatening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," the statement said.
The company "does its best to listen carefully to customer feedback every day" and "prides itself on knowing that 80% of its business comes from repeat customers," Fashion Nova said.