The Federal Trade Commission (“FTC”) is distributing more than $ 6 million to Fashion Nova customers after the popular retailer failed to properly disclose it [them] or give them the option to cancel their orders if [it did not] Send goods on time. “After reaching an agreement between the FTC and the Southern California-based fast fashion company almost a year ago, the government agency announced that it was” sending refunds to more than 500,000 people “and found that it was not just shipping Fashion Nova in violation The promised timeframe for “fast shipping” continued against federal law when it “did not give customers the opportunity to cancel [the delayed] Orders and chose to issue gift cards to compensate customers for goods not shipped, rather than issue refunds. “
In a statement Thursday, the FTC said it is paying “more than $ 6.5 million to 518,552 consumers, including more than 40,000 consumers living in 169 different countries outside the United States.” The distribution of the refunds – which amounts to USD 12.60 per individual consumer – results from an agreement between Fashion Nova and the FTC, in which the fees charged against Fashion Nova were paid.
The settlement, filed in and approved by the U.S. District Court for the Central District of California in April 2020, asked Fashion Nova to pay millions to consumers who bought products from their website after failing to keep their offers of “Fast Shipping” and “2-Day Shipping” and advertising that consumers “can expect your items quickly!” (Under the terms of the settlement, “Fashion Nova will have to pay $ 9.3 million to reimburse consumers harmed by the company,” the FTC stated last year. “Of that, $ 7.04 million will be sent to the FTC Consumer reimbursement requires $ 2.26M to be reimbursed directly from the company to consumers, whereas consumers who received gift cards instead of reimbursements when the company violated the mail order rule are eligible for a reimbursement under the settlement. “)
In addition, the out-of-court decision resulted in a permanent disposition order preventing Fashion Nova from engaging in conduct that violates the federal mail, internet, or telephone ordering rule (“Mail Order Rule”) . B. sending orders that consumers have placed on their ecommerce website within the estimated time frame they have provided to consumers and failing to comply with any legally required measures related to such delays, namely providing a “Revised shipping” for these consumers date that is no more than 30 days after the original shipping date “and gives them the option to cancel the order.
In announcing the settlement last year, the FTC claimed it had “received thousands of complaints about Fashion Nova’s shipping and refund practices from American consumers as well as hundreds of consumers in Canada and more than fifty other countries.” [who were] affected by the company’s actions. “
Under the FTC’s mail order rule, which applies to goods sold to consumers online, by mail, or over the phone, a retailer must “clearly offer to the buyer if a retailer is” unable to ship goods by the original shipping date ” and, conspicuously and without prior request, the option to either agree to a delay in shipping or cancel the buyer’s order and receive an immediate refund. “Fashion Nova allegedly did not do this as it did not notify consumers of the delays and did not give them the option to cancel their existing orders in the face of such delays.
Crowell & Moring attorneys, Christopher Cole and Helen Osun, reflecting on the settlement, which shows “the potential impact” mail order rule violations can have on retailers, claim that “Online retailers have a strict schedule and calendar for shipping orders must adhere to. “If you are unable to fulfill orders” within the timeframe advertised on their website, and in any case within 30 days, you must meet the mail order requirements for notification of rights of withdrawal “.
This article originally appeared in The Fashion Law.