Shein to pay 100 million dollars to settle US FTC probe

Shein has agreed to pay 100 million dollars to settle a US Federal Trade Commission (FTC) investigation into delivery delays and other customer complaints, Reuters reported, citing a source with direct knowledge of the matter.

The settlement is equivalent to 44 percent of Shein’s second-quarter profit, according to Reuters. In a statement to the news agency, Shein said it had “reached a constructive outcome with the FTC” and that more information would be shared soon. An FTC spokesperson declined to comment.

The company had warned in July filings for its Hong Kong IPO that the US probe could lead to significant fines.

Consumers filed more than 12,000 complaints about Shein covering more than 11 million dollars in purchases between January 2020 and June 2026, according to FTC records reviewed by Reuters. Some customers told the FTC and the Better Business Bureau that packages marked as delivered never arrived and that Shein’s customer service did not resolve the issue. Reuters said it could not independently verify the complaints or whether they were resolved.

The settlement adds to regulatory and tax pressure on Shein in Europe and the US. Shein shares have fallen 22 percent from their 1 September listing price, Reuters reported, as the EU’s 3-euro fee on low-value e-commerce parcels weighs on its European business. An additional 2-euro handling fee took effect on 1 November, bringing the total to 5 euros per separate customs code.

“The way these tariffs are implemented is extra punishing for Shein,” Mike Ryan, head of e-commerce insights at Smarter Ecommerce, told Reuters.

Known for 5-dollar dresses and 10-dollar jeans, Shein has raised prices as the US and Europe closed customs duty loopholes. CEO Sky Xu said in September that the company would develop more higher-priced brands to boost profitability.

Shein remains under European Commission investigation over illegal products on its marketplace. Last year, France’s data protection authority fined it 150 million euros over the improper use of cookies.

The FTC has previously fined Fashion Nova 9.3 million dollars in 2020 and Crocs-owned Hey Dude 1.95 million dollars in 2023 over shipping-related practices.

This article was written with the assistance of AI.