Fashion Nova is paying out more than $9 million to consumers after violating FTC rules on shipping and refunds — here's how to get your money

• The Federal Trade Commission ruled that Fashion Nova is required to pay $9.3 million in settlement fees to shoppers for violating shipping and refund policies.
• According to the FTC, the company "didn't properly notify consumers and give them the chance to cancel their orders when it failed to ship merchandise in a timely manner," and the company illegally used gift cards in place of full refunds for unshipped orders.
• An FTC spokesperson told Business Insider that Fashion Nova shoppers who were given gift cards in place of a refund and haven't yet spent them will be reimbursed directly from the retailer. Others impacted by the violations will be paid out by the FTC in a "process that has not yet been determined."
• "These issues stemmed from exponential growth in 2017 which taxed our warehouse and IT systems," a Fashion Nova spokesperson told Business Insider. "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."
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Fashion Nova — the fast-fashion retailer best known for its celebrity outfit knockoffs — is once again finding itself in hot water.

The Federal Trade Commission ruled on Tuesday that Fashion Nova is required to pay $9.3 million in consumer settlement fees for violating the agency's mail order rule on shipping and refund protocols. According to the FTC, the company "didn't properly notify consumers and give them the chance to cancel their orders when it failed to ship merchandise in a timely manner," and the company illegally used gift cards in place of issuing full refunds for unshipped orders.

Fashion Nova has long boasted about its lightning-fast shipping speeds, in addition to its quick turnaround of replica designer looks for cheap. However, in its ruling, the FTC wrote that the company "regularly failed to meet its promises to consumers" including missing 2-day shipping windows and not delivering on promotional claims to "expect your items quick."

"The same rules that we have enforced for nearly 50 years against catalogers and other mail-order companies also apply to online sellers," Andrew Smith, director of the FTC's Bureau of Consumer Protection, said in a press statement. "Online retailers need to know that our mail order rule requires them to notify customers in the event of shipping delays and offer the right to cancel with a full refund—not just a gift card or a store credit."

Fashion Nova is no stranger to controversy. The FTC ruling comes just one week after Fashion Nova was the subject of social media scrutiny for a promotional text sent to shoppers urging them to spend their stimulus checks on store-wide sales during the coronavirus outbreak. In the past year alone, the company was the subject of an investigation by the US Department of Labor for reportedly paying factory workers illegally low wages, as well as the recipient of numerous lawsuits from fashion companies like Versace for copyright infringement.

In a statement to Business Insider, a Fashion Nova spokesperson said shipping delays came from "exponential growth" that strained internal infrastructure in past years and noted that the company is "pleased to be putting this matter behind us."

"Fashion Nova resolved these issues two years ago in April 2018. We fully cooperated with the FTC's detailed mail order rule requirements once brought to the company's attention," the spokesperson said. "These issues stemmed from exponential growth in 2017 which taxed our warehouse and IT systems. 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."

So how can you get your refund?

An FTC spokesperson told Business Insider that there are "two 'pots' of refund money." The first goes to shoppers who were sent gift cards and have not spent them, who will receive money directly from Fashion Nova in the coming weeks. The second will be given to additional consumers impacted by false shipping claims, which will be reimbursed by the FTC in a "process that has not yet been determined."

The spokesperson said that the FTC will "reach out directly to affected customers when the process is set" for the latter group.