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Fashion Nova, the Vernon-based fast-fashion retailer known for a heavy Instagram presence backed by celebrities like Cardi B, reached a $1.75 million settlement Thursday with local prosecutors over its returns policy and shipping delays.

The consumer protection lawsuit was settled just days after the New York Times published an investigation revealing illegal labor practices uncovered by federal officials. The report found factory workers in the Los Angeles area get paid illegally low wages to produce Fashion Nova’s bodycon dresses and other trendy pieces that often sell for around $15 to $40.

However, the settlement reached with the L.A. County District Attorney’s Office deals with Fashion Nova’s shortfalls not with its employees but with its customers. As part of the deal, the company has agreed to pay $250,000 in restitution to customers and another $1.5 million in costs, penalties and other fees.

The retailer did not admit to any wrongdoing as part of the settlement. The civil complaint was filed in Alameda County Superior Court by prosecutors from the counties of Los Angeles, Alameda, Napa and Sonoma.

Stefan Friedman, a PR representative for Fashion Nova, wrote in an email that issues with returns and shipping delays date back to more than 18 months ago and “were immediately addressed.” He did not address the federal labor investigation the retailer is facing.

“The world of eCommerce continues to evolve at a rapid pace, and as an innovator and leader we constantly strive to elevate our customers’ experience and similarly rectify any mistakes as quickly as possible,” he wrote.

Until at least April 2018, the company repeatedly failed to ship items to California customers within 30 days and did not provide adequate notices about the delays, according to prosecutors.

According to state law, online sales delivered to California customers must generally be shipped within 30 days, and customers must be given a refund or written notice if the shipment is delayed.

“The content of these notices is regulated by statute and must include the expected duration of the delay and an offer for a refund upon request,” a statement from the DA’s office explains.

This image shows Fashion Nova's return policy for a dress on Dec. 19, 2019, as listed on its website.
This image shows Fashion Nova’s return policy for a dress on Dec. 19, 2019, as listed on its website.

Prosecutors said Fashion Nova also failed to clearly state its policy for returned items. The retailer’s website currently displays a detailed policy providing store credit for returns with very specific parameters for products of certain prices: “All items with prices ending in $.00, .96, .97 and .98 are final sale and cannot be returned for store credit.”

As part of the settlement, prosecutors said, Fashion Nova has agreed to change some business practices. That includes the clarification of its returns policy as well as providing cash refunds in some instances, according to DA’s office spokeswoman Venusse Navid.

“If the item they have is out of stock or if they ship the wrong item they are required to provide a cash refund,” Navid wrote in an email. “If the item is not in usable condition or damaged, they must replace the item within 3 days or refund the consumer the purchase price.”

According to Navid, the deal reached with prosecutors also requires Fashion Nova to appoint a senior level executive at the company as a “compliance officer” who will oversee those changes and keep track of consumer complaints.

The DA’s office is not involved in any of the federal labor investigations facing Fashion Nova, Navid said. The New York Times reported the company owes $3.8 million in back wages to hundreds of workers in the L.A. area.