HeyDude, acquired by Crocs, Inc. in February 2022, will pay $1.95 million in fines over allegations they misled customers by only allowing positive reviews to appear on its website. Crocs said the violations primarily occurred prior to the acquisition.
According to a statement by the Federal Trade Commission (read here), from January 2020 to June 2022, HeyDude, through a third-party online management review interface, elected to have all five-star reviews – the best rating – posted on its website with little scrutiny. In many instances, however, the company rejected and did not publish less favorable reviews.
More than 80 percent of reviews that failed to provide four or more stars were rejected, according to the FTC.
In addition, the FTC also claims during the same time period the company violated its Mail, Internet or Telephone Order Merchandise Rule in several ways, including failing to use shipping delay notices or cancel consumer orders. The FTC said the company also issued consumer gift cards instead of sending “prompt refunds of the original payment for merchandise ordered but 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.
The proposed court order will require HeyDude, which was acquired by Crocs Inc. in early 2022, to publish all reviews and abide by the Mail Order Rule. The order also required a $1.95 million fine that will be used to provide refunds to consumers.
Crocs said in a media statement that the violations “primarily occurred over the holiday months in 2020, prior to Crocs’ acquisition of the company.”
“Contrary to the statement released earlier by the FTC, the monetary portion of the settlement is not related in any way to review suppressions, but instead relates to fulfillment times of a small number of HeyDude product orders placed online,” the Crocs statement continued. “Since our acquisition of the company, we have worked diligently with the FTC to come to a quick and satisfactory resolution, and we are pleased to put this behind us and move forward with the excellent customer experience, transparency and accountability for which Crocs’ brands are known.”
Photo courtesy HeyDude
