The Federal Trade Commission said it’s paying out more than $6.5 million to 500,000-plus Fashion Nova shoppers under a settlement reached last year after the company was found to have not properly notified consumers to give them the chance to cancel their orders when shipments were delayed.
“Fashion Nova promised consumers fast shipping of their orders but regularly failed to meet those promises, didn’t properly notify consumers of shipping delays, and didn’t give them the chance to cancel their orders and receive prompt refunds,” the FTC said in a statement Thursday, pointing to violations of its Mail, Internet or Telephone Order Merchandise Rule.
“The company also illegally used gift cards to compensate consumers for unshipped merchandise instead of providing refunds,” the FTC said. “Gift cards are not considered refunds under the requirements of the Mail Order Rule.”
The $6.5 million will go to 518,552 consumers around the world via $12.60 payments, made through PayPal or paper checks. Fashion Nova is also refunding some customers directly.
Thursday’s payments are part of the company’s $9.3 million settlement with the FTC, revealed in April.
At the time, the FTC said Fashion Nova made “made clear promises to consumers for years that they offer fast shipping of their products,” but “regularly failed to meet its shipping promises to consumers, and failed to meet the Mail Order Rule’s requirement that consumers be notified of shipping delays and given the chance to cancel orders and receive prompt refunds.”
At the time, Fashion Nova, which has seen huge growth online with up-to-the-second looks, said it cooperated with the FTC on the process and resolved the issues in April 2018.
“These issues stemmed from exponential growth in 2017, which taxed our warehouse and IT systems,” Fashion Nova said. “We are proud of who we are and where we are going and are pleased to be putting this matter behind us so that we can continue to focus on our customers.”
A Fashion Nova spokesperson said 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 brought to the company’s attention….We have made additional investments in our operating systems, training and help center to further optimize support to our customers.”
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