Fashion Nova to Pay $4.2 Million for Allegedly Blocking Negative Reviews
We are all aware of how online reviews work and why they are important to our businesses. It’s true that fake online reviews can be taunting and troublesome but honest reviews can also be helpful depending on which way you look at it. There are deceptive endorsements, fake rants, and there are legit reviews. But how do we decipher between them all? Sometimes, that is the main question many business owners struggle to find the answer to.
As noted by the FTC (Federal Trade Commission), fake online reviews and deceptive endorsements is unlawful. The FTC is now using its Penalty Offense Authority to remind advertisers of the law by sending “Notice of Penalty Offenses” to hundreds of companies who may be teetering on the edge of the law. Companies can be charged up to $43,792 per violation, the FTC admits — if businesses use endorsements in ways that run counter to prior FTC administrative cases.
Fashion Nova, LLC is one of those companies that have been “teetering” for a while. The fashion retailer will now be prohibited from suppressing customer reviews of its products and required to pay $4.2 million to settle Federal Trade Commission allegations that the company blocked negative reviews of its products from being posted to their website.
The California-based retailer is known for trendy clothing items and primarily sells its “fast fashion” products online. The FTC claims Nova misrepresented their own products by suppressing reviews with ratings lower than four out of five stars.
“Fake reviews and other forms of deceptive endorsements cheat consumers and undercut honest businesses,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Advertisers will pay a price if they engage in these deceptive practices.”
One thing for certain, blocking reviews or paying individuals & companies to block reviews is against FTC guidelines and can cause you and your business to lose not only credibility but a ton of money too!
According to the FTC’s complaint, 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. Hey, fashion friends – take note.
Suppressing a product’s negative reviews deprives consumers of potentially useful information and artificially inflates the product’s average star rating.
The Federal Trade Commission works to promote competition, stop deceptive and unfair business practices and scams, and educate consumers. This is the second case the FTC has filed against the popular California retailer in recent years.