FTC fines online store $4 million for hiding reviews below 4 stars – Techdoxx

Deepak Gupta
Deepak Gupta January 26, 2022
Updated 2022/01/26 at 3:07 AM

We all know that online reviews should be taken with caution, but generally you would like to think that a product with an average of 4.5 stars is better than one with an average of 3.5 stars. You could be wrong, as the site you are looking at may not even allow bad comments to appear — like Fashion Nova, which just received a $4.2 million liquidation order from the FTC.

Here’s what happened: Fashion Nova used a third-party review management tool, which is certainly common for anyone running a website that lets users review the items they buy. But then they did a bad thing: from 2015 to 2019, they had 4- and 5-star reviews automatically appear on the site, while anything below that would require approval. And they didn’t approve. hundreds of thousands of them, artificially inflating the perceived quality of the goods on the site.

“Fashion Nova misrepresented that the reviews on their website accurately reflected the opinions of all shoppers who submitted reviews to the website. The proposed settlement sets out provisions to address Fashion Nova’s deceptive practice and orders Fashion Nova to pay $4.2 million for damages suffered by consumers.” wrote the FTC in a blog post explaining the situation.

You can view the various documents related to the case here.

It appears the agency has caught the scent of other scams like this being perpetrated under the auspices of third-party review platforms, as it has since sent warning letters to 10 other companies (like the original, unnamed one) that operate them. and that did a broader “beware of yourself” ad in October about false reviews and misleading endorsements.

In case you’re worried that Fashion Nova is just an innocent victim here, it’s worth noting that this isn’t the company’s first contact with the feds, as in 2020 it agreed to pay $9 million for shady cancellation and return policies. . Warn emptor! (Unfortunately, no one knows whether these fines will be paid in full.)

Separately, but likely timed to harmonize with this announcement, the FTC has updated its guidelines for marketers who want to pay or order online reviews. There are ways to do this the right way, such as being transparent and allowing positive and negative comments to surface as soon as they are asked. And there are… other ways. And issued new guidelines for platforms Publication assessments that they should think twice about manipulating the source, incentives, or visibility of reviews for their own benefit.

Fake reviews are a plague on the online economy, but so far no one has solved the problem or the cure is – for retailers – worse than the disease, as it requires too much work or the collapse of several lucrative deals. Perhaps this little flexibility from the FTC will help push them in the right direction.

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