Fashion retailer Revolve Group faces a nationwide class action lawsuit alleging deceptive marketing practices through undisclosed influencer endorsements. The complaint, seeking damages exceeding $50 million, comes as the company adjusts its marketing strategy amid business challenges.
Allegations of Non-Compliance
As The Fashion Law (TFL) reports, plaintiff Ligia Negreanu filed the lawsuit on April 11 in the U.S. District Court for the Central District of California against Revolve, FWRD LLC, Alliance Apparel, and influencers Cindy Mello, Tika Camaj, and Nienke Jansz.
The complaint alleges the company compensated influencers with cash, luxury trips, and free products without requiring proper disclosures under Federal Trade Commission (FTC) guidelines.
According to the lawsuit, Revolve’s influencers failed to use required disclosures like “#ad” or Instagram’s “paid partnership” label, leading consumers to believe endorsements were unpaid and authentic. The suit contends this practice artificially inflated perceived product value, with Revolve items allegedly commanding 10% to 40% higher prices than competitors.
The case emerges amid what SwayID founder and CEO Kaeya Majmundar describes as a “consumer trust crisis” in the creator economy, noting that “a vast majority of influencers admit to lying or exaggerating claims in sponsored content.” Majmundar identifies two types of brands in the market: those with an “I’m never going to get sued” mindset typical of smaller brands, and those with an “I’m always going to get sued” approach common among Fortune 500 companies that more strictly enforce compliance.
Business Impact
The legal challenge arrives as Revolve, which managed to scale to over $1 billion in annual revenue with the help of influencer marketing, shows signs of business decline. According to SEC filings, the company’s net sales decreased 3% in 2022, while its marketing spending dropped from $181 million in 2022 to $171 million in 2023.
In response, the company started expanding beyond festival and vacation apparel to focus on everyday categories, including office wear and beauty.
Regulatory Scrutiny Intensifies
The complaint states that earlier this year, the Better Business Bureau’s National Advertising Division issued a warning to Revolve regarding its influencer practices. Negreanu claims Revolve acknowledged legal risks in its 2023 Annual Report but chose not to impose disclosure requirements on partnered influencers.
This lawsuit appears to exemplify what Majmundar describes as a new risk in the creator economy: “name and shame agents” – entities actively seeking non-compliant content to initiate lawsuits. “Similar to the surge in website accessibility lawsuits after regulations were established, the creator economy now faces legal risks” from such entities, Majmundar told Net Influencer earlier this year.
The lawsuit includes claims under the FTC Act, Florida Deceptive and Unfair Trade Practices Act, California’s Consumer Legal Remedies Act, Unfair Competition Law, False Advertising Law, and similar statutes in more than 20 other states.
Negreanu seeks class certification, damages, and injunctive relief, claiming at least one million consumers have been injured by purchasing premium-priced products based on what they believed were authentic recommendations rather than paid endorsements.
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