Home Fashion Brands Fashion Nova FTC and Fashion Nova Settled Case for $4.2 Million

FTC and Fashion Nova Settled Case for $4.2 Million

FTC and Fashion Nova Settled Case for $4.2 Million
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Tuesday, February 8, 20,22

Many customers will not buy any product or service unless they have read the reviews. Retailers may be tempted not to display negative reviews as prominently as the positive ones, or to hide them altogether. However, a recent FTC settlement highlights the importance of displaying all reviews, including the negative ones, in a neutral manner.

Like most e-commerce websites, “fast fashion”Fashion Nova allows customers to leave product reviews and they are published on every product page on its website. FTC complaint says that Fashion Nova used a third-party to manipulate the customer reviews that shoppers would see. FTC specifically claimed Fashion Nova used an “online product review management interface”To automatically post all four- or five-star reviews, you will need to review and approve all reviews with three or fewer stars.

FTC alleged Fashion Nova had misled consumers. Fashion Nova and the FTC settled the case for $4.2million.

The settlement requires Fashion Nova to display all reviews received, including the negative ones, on each page that displays product reviews. It doesn’t. You should display reviews that are:

  • Unrelated to the respective product or Fashion Nova’s service, delivery, exchanges, or returns; or

  • Unlawful, profane and obscene.

  • An FTC Press release states that the case is “the FTC’s first involving a company’s efforts to conceal negative customer reviews.”

    The FTC also recently issued two new guidance documents that address customer reviews.

  • A guide for marketers on soliciting reviews and working in conjunction with third-party review portals. Here,

  • A guide to online review platforms. Here.  

    Related Article  Fashion Nova slapped with $4.2M fine for filtering out negative reviews online | Hogan Lovells
  • The FTC guidance and Fashion Nova settlement provide e-commerce retailers with some useful information. “do’s and don’ts”For customer reviews, including the following:

  • Do not treat negative and positive customer reviews differently.

  • Do not solicit customer reviews.

  • It is important to clearly and prominently disclose any incentives received in exchange for reviews.

  • DON’T double-count reviews, i.e., across platforms.

  • DON’T manipulate or substantively alter reviews.

  • DO have procedures in place for detecting fake and manipulated comments, including from third-party vendors who advertise their ability to increase customer ratings and reviews.

  • The FTC’s complaint against Fashion Nova and its published guidance suggests that this will be an enforcement priority in the coming months and years. E-commerce retailers should have procedures in order to ensure that customer review practices are consistent with evolving guidance from the FTC or other regulators.

    ©2022 Pierce Atwood LLP. All rights reserved.
    National Law Review, Volume II, Number 39

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