Shein Sued Over Hidden Influencer Payments and Deceptive Social Media Marketing

A new class action lawsuit is dragging fast-fashion titan Shein into the legal spotlight, as eight U.S. consumers allege the global retailer misled shoppers by secretly paying influencers to promote its products, a practice they say boosted Shein’s growth at the expense of American consumers. The litigation, filed in February 2025 in Illinois federal court, accuses Shein of deceptive marketing and seeks monetary damages, restitution, and injunctive relief on behalf of millions of shoppers nationwide

Shein’s Influencer Scheme on the Basis of the Lawsuit

The plaintiffs claim that, between 2022 and 2024, Shein paid hundreds of Instagram influencers to promote its fashion without disclosing their financial arrangement with the brand. According to the class action, these undisclosed paid endorsements made Shein’s products appear more authentically popular and coveted than they actually were—a tactic designed to boost consumer trust and inflate prices.

The complaint draws a striking parallel between Shein’s behavior and the Fyre Festival scandal, which saw event promoters jailed for fraud after failing to disclose influencer payments and relationships. Plaintiffs argue that while Billy McFarland from Fyre Festival saw federal prison for such marketing, Shein has experienced a meteoric rise, surpassing household names like H&M and Zara to become a multi-billion dollar phenomenon.

Market Impact: Shein’s Meteoric Growth Fueled by Social Media Hype

The lawsuit squarely credits Shein’s influencer marketing engine with the company’s explosive expansion since early 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.

Plaintiffs claim this massive leap in market share and revenue is, in part, built on the back of misleading, undisclosed pay-to-promote social media campaigns, undermining honest competition and distorting consumer perceptions. The implication is clear: shoppers were often persuaded to buy Shein’s ultra-cheap, ultra-trendy fashion not through genuine word of mouth, but by influencers whose endorsements were paid advertisements in disguise.

Seeking Justice: Nationwide Class and Legal Demands

The eight plaintiffs seek to represent all U.S. consumers who bought Shein products from June 24, 2019, onward. They allege they paid artificially inflated prices for Shein products due to the retailer’s misleading influencer relationships and are demanding not only monetary relief but also a court order to stop such conduct in the future.

Their legal team, Keith L. Gibson and Bogdan Enica of Keith Gibson Law PC, argues Shein’s marketing violates both federal and state commercial laws by deceiving the public about the source and authenticity of product endorsements.

Shein’s Response: Push for Arbitration

Shein has responded aggressively to the lawsuit, petitioning the Illinois federal judge to compel arbitration—a private dispute resolution process that can bar class actions—from the get-go. Shein argues consumers “agreed to resolve any disputes with the company through binding arbitration” when they shopped on Shein’s website or mobile app, as laid out in Shein’s posted terms and conditions.topclassactions

“Shein 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.”

According to Shein, these terms were clear: using their platform signals agreement to settle claims by individual arbitration, not mass litigation. If accepted by the court, this legal maneuver could force each aggrieved Shein shopper into a private proceeding, drastically reducing public scrutiny and weakening collective consumer leverage.

Industry-Wide Issue: The Hidden Side of Influencer Marketing

The Shein case is part of a larger reckoning in e-commerce and social media. In recent years, the Federal Trade Commission (FTC) has ramped up pressure on brands and influencers alike to disclose paid partnerships, after noting that undisclosed or misleading endorsements confuse consumers and violate longstanding American advertising law.

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.

The scale of the alleged practices at Shein is breathtaking and, if proven, would represent one of the most successful and extensive undisclosed influencer marketing campaigns in retail history.

What’s at Stake: Modern Retail, Authenticity, and Consumer Protection

Regulatory and legal experts are closely watching this case, as it could help define how transparency rules are enforced in a world where shopping and social influence are increasingly intertwined.

If the court rejects Shein’s arbitration arguments and the case proceeds, Shein could face enormous financial penalties, injunctive relief, and orders to clearly label all future influencer promotions. A strong result for the plaintiffs could also encourage shoppers to demand stricter disclosure and more authentic endorsements, and put all fast fashion and direct-to-consumer brands on notice.

The outcome will ripple through the billion-dollar influencer economy—where many designers, celebrities, and companies rely on the invisible hand of paid endorsements to drive sales.

Conclusion: Corporate Responsibility and the Future of Retail

The class action filed as 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 challenges Shein to explain and change its secretive approach to influencer partnerships.

With the stakes so high, it’s the beginning of a public conversation about transparency, customer trust, and fairness in the world of social media-driven shopping.

For those who purchased from Shein after June 24, 2019, or who have concerns about influencer endorsements, keeping watch on updates may provide opportunities for inclusion in the proposed class or changes in the broader retail landscape.