FTC Sends $6.5 Million to Fashion Nova Customers Due to Shipping Issue – WWD

The Federal Trade Commission said it paid more than $6.5 million to more than 500,000 Fashion Nova shoppers under a settlement reached last year after it was found that the company did not properly notify consumers to give them a chance to cancel their orders when shipments were delayed.

“Fashion Nova has promised consumers to ship their orders quickly, but has regularly failed to deliver on those promises, failed to properly notify consumers of shipping delays, and did not give them the opportunity to cancel their orders and receive refunds immediately,” the FTC said. Thursday’s statement, indicating violations of the mail, internet or telephone merchandise rule.

“The company has also illegally used gift cards to reimburse consumers for unshipped merchandise instead of offering refunds,” the Federal Trade Commission said. Gift cards are not considered refunds under the requirements of the mail order rule.

$6.5 million will go to 518,552 consumers around the world via payments of $12.60, made through PayPal or paper checks. Fashion Nova also refunds some customers directly.

Thursday’s payments are part of the company’s $9.3 million settlement with the Federal Trade Commission, which was revealed in April.

At the time, the FTC said Fashion Nova had made clear promises to consumers for years that they offered expedited shipping for their products, but had “regularly failed to deliver on shipping promises to consumers, and failed to meet the requirements of the Mail Order Rule which states that consumers are notified of shipping delays and given the opportunity to cancel orders and receive a refund.” Refunds immediately.”

At the time, Fashion Nova, which has seen explosive growth online with a modern look, said it had teamed up with the FTC on the operation and resolution of the issues in April 2018.

“These issues stemmed from the explosive growth in 2017, which taxed our warehouses and our IT systems,” Fashion Nova said. “We are proud of who we are and where we are going and are happy to put this behind us so we can continue to focus on our customers.”

A spokesperson for Fashion Nova said on Friday: “Fashion Nova resolved these issues three years ago in April 2018. We fully cooperated with the FTC’s detailed mail order rule requirements once they came to the company’s attention… We made additional investments in our operating systems and our Training and Assistance Center To further improve our customer support.”

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