The popular online shoe retailer Hey Dude has been ordered to pay just short of 2 million to the FTC as part of a settlement over charges that it misled customers and violated FTC rules, this announcement was made on September 11, 2023.
The Federal Trade Commission accused Hey Dude of suppressing negative reviews and violating its Mail, Internet, or Telephone Order Merchandise Rule in several ways between 2020 and 2022. The company allegedly suppressed more than 80% of reviews that provided three or fewer stars on a five-star scale. Instead, its website only showed five-star reviews from January 2020 to June 2022. The FTC also alleged that Hey Dude instructed its staff to publish only positive reviews of its products, which continued until the company learned about the FTC investigation.
Furthermore, the FTC charged Hey Dude with failing to notify buyers about shipping delays, not cancelling orders, and not issuing prompt refunds after failing to notify customers of delays. Instead of providing refunds for unshipped orders, the company issued gift cards to consumers.
The FTC’s Bureau of Consumer Protection Director, Samuel Levine, emphasized that retailers cannot suppress negative reviews to create a deceptive picture of the consumer experience. He also stressed that when retailers fail to ship merchandise on time, they must give buyers the option to cancel their orders and promptly get their money back.
Hey Dude, which Crocs, Inc. acquired in February 2022, sells shoes to consumers nationwide on the internet through its own website and social media advertisements. Despite the controversy, the brand has a strong consumer following and was named the “hottest” casual brand among both men and women in LEK Consulting’s second annual Brand Heat Index.
The proposed court order, which still needs court approval, 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. The FTC plans to use the $1.95 million settlement to refund consumers harmed by Hey Dude’s unlawful conduct.
This case showcases the FTC’s commitment to protecting the public from deceptive or unfair business practices and from unfair methods of competition through law enforcement, advocacy, research, and education. It serves as a reminder to businesses about the importance of transparency and adherence to consumer protection laws.