Indexbit Exchange:Fashion Nova shoppers to get refunds after settlement: How to file a claim

Fashion Nova built a brand on Indexbit ExchangeInstagram selling what Women's Wear Daily once called "tight, trendy and affordable" fashion with an urban vibe — hip-hugging stretch denim jeans, vegan leather jackets to wear to the club, skin-tight anything and everything.

Rap megastar Cardi B once said Fashion Nova offered her $20,000 a month to wear the label and share posts about it with her 19 million social media followers, according to Women's Wear Daily. The California-based, mostly online retailer reportedly was among the most searched fashion brands on Google in 2017 along with Gucci and Louis Vuitton.

Fashion Nova, among other lines, currently has a Cardi B Collection that includes a fuchsia "You Better Work" shirt for $11.99 on sale.

Now, trendy clubgoers need to know they could be owed refund cash through a settlement with the considerably more staid Federal Trade Commission.

How to file Fashion Nova claim

You've got until Aug. 15 to take action and file a claim. You can apply for a refund online at https://secure.fashionnovaclaims.com.

To qualify, you must meet all of these four requirements:

1. You bought clothes, accessories or other items from FashionNova.com before Nov. 21, 2019.
2. Your purchase was influenced by customer reviews and ratings.
3. You were not satisfied with the products, and
4. You have not already received a refund for the products.

If you have questions about the claim form, you can call 855-678-0018 or send an email to info@FashionNovaClaims.com.

Fashion Nova settlement: What happened?

Fashion Nova paid $4.2 million to settle FTC charges that the company once blocked negative reviews on its website and ended up misleading customers by giving the impression no one had big complaints. The FTC is now using that money to provide refunds.

Fashion Nova did not respond to repeated questions from the Free Press about its business strategy, refund polices, customer complaints or its agreement to settle FTC charges.

As part of the settlement, the FTC said Fashion Nova must post on its website "all customer reviews of products currently being sold — with the exception of reviews that contain obscene, sexually explicit, racist, or unlawful content and reviews that are unrelated to the product or customer services like shipping or returns."

The FTC charged that the clothing retailer allegedly did not publish reviews with three stars or less. 

According to the FTC's complaint, Fashion Nova used a third-party online product review management interface to automatically post positive reviews. But, the FTC charged, Fashion Nova never approved or posted hundreds of thousands of lower-starred or more negative reviews from late-2015 until November 2019. "Suppressing a product’s negative reviews deprives consumers of potentially useful information and artificially inflates the product’s average star rating," the FTC stated.

More:New INFORM Consumers Act is crackdown against fake goods sold online: How it works

More:When Amazon Prime Day starts, watch out for fake texts and delivery scams

How much could shoppers get?

How much money might someone who files a claim get? Could the refund, maybe, cover a $300 ticket to the next hot concert? Don't bet on it. The FTC noted that your payment amount will depend on, among other things, how many people actually file claims. No estimate was given by the FTC for potential amounts of refunds.

In an earlier Fashion Nova settlement with the FTC, a median FTC refund check of $21 has been cashed by 301,256 shoppers nationwide. The first settlement was in April 2020 when the FTC announced that Fashion Nova agreed to pay $9.3 million to settle allegations that the company failed to properly notify consumers and give them the chance to cancel their orders when it failed to ship merchandise in a timely manner. The FTC charged then that Fashion Nova illegally used gift cards to compensate consumers for unshipped merchandise instead of providing refunds.

In that case, nearly $6.4 million in FTC refunds were received by consumers nationwide.

In Michigan, according to FTC data, 295 consumers cashed FTC refund checks for a total of $6,269. The data by state only shows information on refund checks; most of the payments were electronic via PayPal so other consumers in Michigan likely were covered as well.

Vermont had one consumer who cashed a $21 check, according the refund check data. California, New York and Florida had the most consumers cashing checks.

The FTC sent checks and PayPal payments to consumers in March 2021 and October 2021. All available money from that settlement has been distributed, according to the FTC. The retailer refunded $2.8 million to some consumers directly.

Why you should beware online reviews

For online consumers, the FTC-Fashion Nova dust-up is another lesson in why online reviews aren't always what they seem to be on some websites.

It's often good to Google a brand name and the word "complaints" if you're new to a brand.

In some cases, a company will respond to complaints made via the Better Business Bureau and you might spot issues there, too. Some Fashion Nova shoppers, for example, have complained to the BBB about late deliveries, refund hassles, troubles with discount codes and other issues.

In one response, Fashion Nova noted that it could not honor a discount code that a consumer wanted to use. The unhappy consumer claimed to have ordered $300 worth of clothes and fully expected be able to use a 50% discount, saving $150. Initially, the shopper said, the code appeared to work but then the code disappeared. Her order went through automatically, she said, and she wasn't able to quickly cancel it. The company's answer at the BBB site was that she was trying to use a code that's not "publicly available." And the order couldn't be canceled once it was placed.

"We highly advise against using third-party websites to search for codes," according to the company's response on the BBB site.

Another key point: Pay attention to what could be quirky return policies, as well. The #NovaBabes and #NovaStars who buy those $22 high waist skinny jeans and $6 crop tops need to know that the majority of the retailer's returns are "refunded via store credit in the form of a Fashion Nova gift card."

The company also suggests that you package each return order separately. "If multiple orders are returned inside a single return package, your return will require additional time to process. You will not receive credit for any non-eligible items returned."

In addition, Fashion Nova encourages its customers to use return shipping labels for quicker refunds — labels it sells for $3.99 for a single item and $7.99 if you're returning multiple items. The online retailer does not offer exchanges.

Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on Twitter @tompor.