Rihanna's lingerie brand accused of deceptive marketing by ad watchdog group

Key Points
  • The nonprofit advertising watchdog group Truth in Advertising has filed complaints to the FTC and California regulators alleging deceptive marketing from Savage X Fenty, Rihanna's lingerie company.
  • Savage X Fenty is part of TechStyle Fashion Group, which has been the subject of criticism for membership models many have said is misleading.
Rihanna speaks during the Fenty Beauty Artistry and Beauty Talk in collaboration with Sephora on September 29, 2018, in Dubai, United Arab Emirates.
Mark Ganzon | Getty Images

Truth in Advertising, a nonprofit advertising watchdog, has filed deceptive marketing complaints with the FTC and California regulators against Savage X Fenty, Rihanna's lingerie brand.

Savage X Fenty has drawn millions in investment funding and has been lauded for its inclusive sizing and diverse marketing.

But Truth in Advertising alleges that the lingerie company deceptively promotes discounts and prices that are only available to consumers who are part of the company's membership program, without clearly disclosing that fact in its marketing. It says consumers are enrolled by the company into an "Xtra VIP Membership" without clearly disclosing terms and conditions, like needing to "take affirmative action every month to avoid recurring monthly charges."

CNBC reviewed the site and found that prices for items defaulted to "VIP" pricing, without giving the option to purchase for a "regular" price. When navigating to the shopping bag, if an item had been added, a "Savage X Monthly Membership" was also added automatically, without changing the pricing. The only way of knowing that membership would result in more charges is by clicking a small "Learn More" button that explains it would incur a $49.95 monthly charge, or by reading a description to the right of the checkout options.

Screenshot from FTC complaint

The complaint also says the retailer employs "dissuasion and diversion tactics" to make it difficult for consumers to cancel their memberships, and that it tells consumers that monthly charges can be used as store credit, but that they can't unless they spend $49.95 or more.

According to the complaint, the company advertises on social media including Instagram, Facebook, TikTok and YouTube, using its own channels, buying ads and using influencers.

Screenshot from FTC complaint

The FTC complaint also alleges that many of Fenty's influencers don't disclose their material connections to the company. The organization said it has "identified a sampling of 70 social media posts by 21 different influencers that deceptively advertise Savage X Fenty products. These posts do not have adequate disclosures of the influencers' material connections to the company either by failing to include any disclosure at all, using inadequate and unclear language to disclose the relationship, or placing the disclosure in a place that will easily be overlooked by consumers."

In an email to CNBC sent Tuesday night, Savage X Fenty's Senior Director of Brand and Communications Emma Tully said the company believes it is compliant with consumer protection laws and has not received inquiries from the FTC. She said "while we wouldn't typically issue a public response, we are because these accusations are false and based on misconceptions of our business."

Tully said the company is "proud of [its] flexible membership program because it allows us to offer unparalleled quality and value to our customers" and claims it has a high Net Promoter Score and an "A" rating from the Better Business Bureau. She said the company provides "multiple disclosures of membership terms" in the shopping experience and in ads, and claimed customers can cancel "at any time" online using a live chat or on the phone.

"While we take all feedback seriously, we believe strongly that we are compliant with consumer protection laws," she wrote.

Fenty's parent company, TechStyle Fashion Group, has drawn scrutiny over similar practices in the past. The company, previously called JustFab Inc., received a torrent of complaints several years ago for "VIP Membership" subscription-style models, which critics say don't make clear when a consumer is signing up for a recurring monthly payment.

JustFab paid $1.8 million to settle a consumer protection lawsuit for misleading advertising in 2014. Its brands also include Kate Hudson's Fabletics (which has received similar complaints, outlined in a 2015 BuzzFeed investigation) and Shoedazzle.

The complaint sent to Santa Cruz County District Attorney's Office in California alleges that TechStyle is violating the 2014 stipulated judgment it entered into with the State of California, which prohibits the company and its partners from making untrue or misleading statements about products or services, deceptively marketing product prices and discounts only available to consumers who are bound by the company's VIP membership, among other practices.

Representatives for Savage X Fenty, TechStyle, the FTC and the Santa Cruz County District Attorney's office didn't immediately respond for requests for comment.

Investors pour $50 million into Rihanna's lingerie line
Investors pour $50 million into Rihanna's lingerie line