Shein class action alleges company hid paid influencer promotions

Shein class action lawsuit overview:

• Who: Eight consumers filed a class action lawsuit against fast-fashion company Shein.
• Why: The plaintiffs claim Shein tried to hide the fact that it paid social media influencers to promote its products.
• Where: The Shein class action lawsuit was filed in Illinois federal court.

The fast-fashion company Shein is urging an Illinois federal judge to compel arbitration in a class action lawsuit that accuses the company of trying to hide that it paid social media influencers to promote its products.

The Shein class action lawsuit was filed in February by a group of eight consumers who claim they paid artificially inflated prices for Shein products between 2022 and 2024 due to the company’s misleading marketing practices.

According to the lawsuit, Shein paid hundreds of Instagram influencers to promote its products without disclosing their financial relationship with the company. The plaintiffs argue this practice misled consumers into believing that the influencers genuinely endorsed Shein products, leading them to purchase items at inflated prices.

The lawsuit compares Shein’s alleged scheme to the infamous Fyre Festival scandal, in which social media influencers were paid to promote a fraudulent music festival without disclosing their connections to the organizers. While Fyre Festival organizer Billy McFarland ended up in federal prison, Shein has become a multi-billion dollar company, surpassing major retailers like H&M and Zara, the plaintiffs say.

They claim Shein’s marketing practices have allowed the company to rapidly grow its market share and revenues in the United States since 2020. Shein’s customer base and sales have exploded since early 2020, with its global annual revenue estimated to have grown from around $3 billion in 2019 to around $30 billion in 2022. 

Shein asks judge to compel arbitration

The plaintiffs seek to represent a nationwide class of consumers who purchased Shein products since June 24, 2019, and they’re seeking monetary damages, restitution and injunctive relief from the defendants.

But Shein argues the plaintiffs must arbitrate their claims because they agreed to resolve any disputes with the company through binding arbitration. The company claims the plaintiffs agreed to Shein’s terms and conditions, which include an arbitration agreement, when they made purchases on the company’s website or mobile app.

The terms govern the use of Shein’s website and mobile app, which both advise consumers that their use of the retailer’s services means they are agreeing to binding arbitration, Shein says.

Meanwhile, consumers recently filed other similar class action lawsuits against Shein, Celsius Holdings, Revolve Group and multiple “influencers” over claims the companies failed to disclose that the influencers were being paid to promote products. 

What do you think of the allegations made in this Shein class action lawsuit? Join the discussion in the comments.

The plaintiffs are represented by Keith L. Gibson and Bogdan Enica of Keith Gibson Law PC.

The Shein class action lawsuit is Amanda Bengoetxea, et al. v. Roadget Business Pte. Ltd., et al., Case No. 1:25-cv-1402, in the U.S. District Court for the Northern District of Illinois.

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