(NEXSTAR) — The popular online shoe retailer Hey Dude has been ordered to pay the Federal Trade Commission $1.95 million to settle charges that it misled customers by “suppressing negative reviews” and violated one of the Commission’s rules “in several ways.”
In a press release Monday, the FTC said Hey Dude suppressed 80% of reviews that provided three or fewer stars on a five-star scale. Instead, between January 2020 and June 2022, the Commission alleges Hey Dude showed only all five-star reviews on its website.
“In many instances, however, it rejected and did not publish less-favorable reviews,” the FTC alleged, adding that the company — which was acquired by another comfort shoe brand, Crocs, in 2022 — instructed staff to only publish good reviews of its products. They maintained that practice until learning the FTC was investigating the company.
Additionally, the FTC said Hey Dude violated its Mail, Internet, or Telephone Order Merchandise Rule on multiple fronts. That includes failing to notify buyers when there were shipping delays, failing to cancel orders and “issue prompt refunds” after failing to notify of delays, and giving consumers gift cards rather than refunds for orders that were not shipped.
“As this case makes clear, when retailers publish consumer reviews online, they cannot suppress negative reviews to paint a deceptive picture of the consumer experience. And when retailers don’t ship merchandise on time, they must give buyers the option to cancel their orders and promptly get their money back,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We will continue to hold online retailers accountable for violations of the FTC Act and other laws we enforce.”
A proposed court order announced Monday still needs to be approved by the court, but it would “bar Hey Dude from future violations of the Mail Order Rule” and require the company to post all reviews, including those it previously withheld — with exceptions for the “moderation of inappropriate content.”
Should the order be approved, Hey Dude would also be required to pay the FTC $1.95 million, which the Commission says it would use to give refunds to consumers “harmed by Hey Dude’s unlawful conduct.”
Crocs did not immediately respond to Nexstar’s request for comment.
