Hey Dude, Inc. to Pay $1.95 Million for Suppressing Reviews and Violating Consumer Protection Rules
In a settlement that highlights the importance of transparency and consumer protection in the online marketplace, Hey Dude, Inc., the popular shoe retailer, has agreed to pay $1.95 million for violating several Federal Trade Commission (“FTC”) regulations. The company, which was acquired by Crocs in 2022, has been charged with suppressing negative reviews and failing to meet obligations under the FTC’s Mail, Internet, and Telephone Order Rule between 2020 and 2022. This settlement highlights the ongoing efforts by the FTC to ensure that online businesses operate honestly and fairly, particularly when it comes to customer feedback and fulfilling orders.
Hey Dude, which markets and sells shoes through its website and social media platforms, was found to have manipulated its review system by blocking or rejecting any reviews that fell below a four-star rating out of five. The company’s actions were deceptive, as they painted an unrealistic picture of customer satisfaction, ignoring the voices of dissatisfied consumers. From January 2020 through June 2022, Hey Dude’s internal procedures instructed staff to only publish five-star reviews, a practice that continued until the company became aware of the FTC investigation. It was only then that Hey Dude began to publish all customer reviews, including the negative ones.
In addition to suppressing reviews, Hey Dude was found to have violated the FTC’s Mail Order Rule, which protects consumers who purchase goods online or through the mail. According to the FTC’s complaint, the company failed to notify consumers of shipping delays and did not give them the option to cancel their orders when shipments could not be fulfilled in a timely manner. Instead of issuing prompt refunds for undelivered items, Hey Dude reportedly offered gift cards, which violated the consumer’s right to a full refund in cases of non-shipment. These actions are in direct violation of the rules set forth by the FTC to ensure consumers receive the goods or refunds they are entitled to.
As part of the settlement, Hey Dude has agreed to pay $1.95 million to the FTC, which is expected to be used for consumer refunds. This payment reflects the gravity of the company’s deceptive practices, which harmed consumers and undermined trust in online retail platforms. The settlement also includes a court order that will require Hey Dude to make significant changes to its business practices. Moving forward, the company will be prohibited from suppressing consumer reviews and will be required to publish all reviews it receives, with the only exceptions being related to the moderation of inappropriate content. Furthermore, Hey Dude will have to comply fully with the Mail Order Rule, ensuring that consumers are notified of shipping delays and offered prompt refunds when necessary.
This case serves as a reminder for all online retailers about the importance of honesty in advertising and customer interactions. The FTC’s actions reinforce the notion that businesses must be transparent about consumer feedback, honor their commitments to customers, and follow the rules that protect the rights of online shoppers. With this settlement, Hey Dude is being held accountable for its past actions and is being forced to change its approach to consumer reviews and order fulfillment moving forward.
For consumers, the $1.95 million refund is a step toward making things right. This case further demonstrates the FTC’s commitment to protecting consumer interests in the increasingly complex world of online commerce.
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This article is for information purposes only. It is not intended to be and should not be relied on as legal advice for any particular matter.