Online shoe store Hey Dude has agreed to pay $1.95 million for allegedly suppressing negative reviews, and violating Federal Trade Commission regulations regarding shipping delays.
Hey Dude, which Crocs acquired for $2.5 billion in February 2022, allegedly posted five-star reviews by customers, but rejected more than 80% of reviews with fewer than four stars, according to an FTC complaint filed Monday in U.S. District Court in Nevada.
The company also “had written policies and procedures instructing its staff to publish certain types of reviews only if they were positive in nature,” the complaint alleged. The review suppression took place between January 2020 and June 2022, according to the FTC.
“The product reviews on the Hey Dude Shoes website did not accurately reflect the views of all purchasers who submitted reviews of the products because in numerous instances Hey Dude Shoes suppressed product reviews with ratings lower than four stars,” the agency wrote in its complaint, which charged Hey Dude with engaging in a deceptive business practice.
The agency has previously taken the position that suppressing bad reviews violates the FTC Act, which prohibits unfair and deceptive practices. For instance, last year the agency fined Fashion Nova $4.2 million to settle allegations that it withheld unfavorable reviews from its site.
The agency is currently considering issuing regulations that would explicitly prohibit companies from creating or promoting fake reviews, suppressing negative reviews by consumers, and offering people incentives to write positive posts.
The FTC also alleged that the online shoe store violated agency rules regarding late shipping, including by failing to cancel delayed orders and issue refunds.
In addition to the proposed fine, the settlement agreement requires Hey Dude to follow regulations regarding delayed shipping in the future, and to publish all reviews -- including ones the company previously rejected. Hey Dude didn't admit to wrongdoing as part of the deal.
The proposed settlement awaits approval by a federal judge.