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MADISON, CONN. August 30, 2021 – With ads for a blockbuster “2 pairs from $9.95” sale on kids shoes, online footwear and clothing retailer FabKids knows how to lure in parents scrambling to outfit their children before school starts. But what many of these harried parents may not realize is that the offer is only available by joining its VIP membership program, a subscription-based plan committing them to charges of $39.95 a month. Now, a truthinadvertising.org (TINA.org) investigation has found that by failing to clearly and conspicuously disclose the terms of its members-only pricing, among other things, FabKids is violating a 2014 court order as well as the Restore Online Shopper’s Confidence Act (ROSCA). On Monday, the ad watchdog filed a complaint with California regulators and the Federal Trade Commission urging them to take appropriate enforcement action.
TINA.org’s investigation catalogued more than 80 examples of deceptive FabKids marketing materials that fail to clearly and conspicuously disclose the conditions of its tempting sale prices. The vast majority of social media ads promote the “2 pairs from $9.95” shoe offer in large colorful print with an ambiguous reference to a “New VIP Offer” in much smaller print with no mention of the subscription plan fees. In addition to running ads on Facebook and Instagram, FabKids also uses influencers to market the brand on their personal accounts, many of whom don’t properly reveal their relationship to the company.
TINA.org also found that FabKids is misleading consumers by failing to clearly and conspicuously disclose the terms of its negative-option offer throughout the shopping process on the FabKids website and by making it difficult for members to cancel.
Techstyle, the parent company of FabKids, may boast five million VIP members across its numerous brands but it is no stranger to scrutiny over its business practices. In 2014, when the company was known as Just Fabulous, it paid $1.8 million to settle a lawsuit alleging that its shopping websites, including FabKids.com, tricked consumers into signing up for subscriptions they didn’t want.
And in February 2020, TINA.org called out another Techstyle brand, Rihanna’s Savage X Fenty for similar violations related to the deceptive advertising of a VIP membership. Techstyle’s portfolio also includes ShoeDazzle, JustFab and Kate Hudson’s Fabletics, which is reportedly preparing for an initial public offering with a targeted valuation of more than $5 billion.
According to Bonnie Patten, TINA.org’s Executive Director, “Techstyle continues to brazenly break the law and violate court orders. It’s time that regulators take action against this company so ensure that more consumers are not deceptively duped into unwanted monthly payments that are difficult to stop.”
To read more about TINA.org’s investigation of FabKids, visit: https://truthinadvertising.org/fabkids-backto-school-ads-mislead-parents/
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Rina Raphael, Los Angeles Times
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