Fashion Nova is paying $4.2 million to settle an online federal review complaint
The Federal Trade Commission takes action against companies it believes are breaking the rules of online screening.
In January, FTC executives announced a $4.2 million settlement with online fast fashion retailer Fashion Nova, resolving allegations that Fashion Nova only offered four- and five-star brands from late 2015 through November 2019. published reviews.
“This is actually the first case by the FTC indicting a company for failing to post negative reviews,” said Amber Lee, attorney with the FTC’s Advertising Practices Division. “We have claimed that Fashion Nova’s reviews section suggests that it contains the ratings of all buyers who submitted an online review, when in fact it has withheld hundreds of thousands of negative reviews over a four-year period.”
The FTC’s complaint states that Fashion Nova used a third-party service to automatically post positive reviews on its website.
According to the FTC, anything under three stars would be withheld for company approval because Fashion Nova had not posted any withheld reviews in four years.
“It’s hard to get a full picture of how often this happens,” Lee said, “but that’s one of the reasons we’re bringing this case: To show the market that we take this seriously.” We want consumers to be able to shop online, especially now that consumers are shopping online so frequently, and look at the company’s website and get a full picture of what other consumers are saying about the product.”
In a statement, Fashion Nova called the FTC’s allegations “inaccurate and misleading.”
“[Fashion Nova] immediately and voluntarily addressed the site verification issues when they became aware of them in 2019,” the statement said.
Under the terms of the settlement, Fashion Nova will be forced to post all customer reviews on its website “except for reviews that contain obscene, sexually explicit, racist or unlawful content.”
According to the FTC, Fashion Nova is also prohibited from “falsifying customer reviews or other endorsements.”
A common problem for online consumers
“One thing this case illustrates,” Lee said, “is how hard it is for a consumer to know if they’re getting the full picture when they look at a seller’s website.”
While no data indicates how many companies remove negative reviews from their website, a recent study by the World Economic Forum found that around 4% of online reviews could be fake.
The FTC advises consumers to “take the time to read and compare reviews from different sources,” Lee said. “We recommend starting with sites that are known for their credible and impartial expert reviews.”
Marketers say that’s easier said than done.
“A lot of people will call my company and ask how they can get reviews removed or suppressed,” said Cynthia Giles, founder of Cut Throat Marketing with offices in Colorado and South Carolina. “They want to know how Fashion Nova did it. And I always recommend – don’t do it, folks. Just be honest.”
Giles said that in her experience, it’s “very, very easy” for businesses to buy positive reviews online. It creates a complex landscape for consumers to navigate.
“It’s not very common in service industries anymore because Google has cracked down on it,” Giles said. But on other major online marketplaces, “It’s very easy to buy reviews with the way their stores are managed and set up with people bidding on them. They’ll just sit and leave reviews.”
The practice can cost consumers in the long run. In the evolving world of online retail, the reviews section plays a crucial role in helping consumers decide if a product is worth the money.
According to a 2021 survey, 54% of online shoppers read reviews for everything they buy. 25% say reviews play the most important role in their purchasing decision.
“If you absolutely have to shop online, I would ask your friends on your social media platforms, ‘Have you bought from this company before?'” Giles said. “Right now it’s very difficult to tell you where to find honest reviews of these social media based ecommerce fashion stores. It’s very, very difficult to find honest reviews for them right now.”
The bigger problem
Aram Sinnreich, the chair of the Department of Communication Studies at American University, said rating schemes play with people’s natural psychology.
“We tend to do what we call a preferential bond,” Sinnreich said. “If something’s popular, it has to mean a lot of other people like it, which in turn has to mean it’s pretty good.”
That assumption, Sinnreich says, “has been completely falsified online by the type of scams we’re seeing at various sites, creating platforms that allow people to boost their reviews for money.”
The money often comes directly from consumers’ wallets.
The World Economic Forum estimates that the online review industry influences $152 billion in spending each year.
“Basically, what we need is the equivalent of a human rights declaration that data should not be falsified and our decision-making processes should not be undermined by automated algorithms,” Sinnreich describes the need for politics at the federal level.
“You cannot have a democratic society, a just and just society, if you cannot be sure that data means what it means,” Sinnreich said. “That it travels where it’s supposed to go and that you have a degree of privacy in your dealings.”
Ultimately, it’s up to us to make sure we’re not influenced by bad actors on the internet.
“Take the time to research different sources for reviews,” said Lee, who pointed out that online fraud can be reported directly to the FTC. “If possible, try to find websites that are known for providing credible or impartial expert reviews.”
Some believe it may be best to avoid the online marketplace altogether.
“Buy your clothes locally,” Giles said. “Try shopping at a local store. That’s probably the best advice I can give you.”