Fitness tech company Fitbit has been hit with an $11 million fine by the Australian Federal Court after playing fast and loose with consumer guarantee rights.
Instigated in October last year by the Australian Competition and Consumer Commission (ACCC), the proceedings centred on allegations that Fitbit LLC made “false and misleading representation to consumers about their consumer guarantee rights”.
Fitbit, currently owned by Google, admitted to “false or misleading” conduct, with two examples mentioned. One involved customer service staff telling 40 consumers between November 2020 and February 2022 that they did not have the right to a replacement product due to a two-year “warranty period” expiring.
The issue was with how the warranty period was applied. 39 of the 40 consumers had contacted Fitbit due to problems with replacement products. In response, Fitbit assessed the warranty period from the purchase date of the original device, not the replacement.
In another instance, Fitbit staff told 18 consumers between May 2020 and February 2022 that they did not have refund rights unless the faulty product was returned “within 45 days of purchase”.
Fitbit admitted that “its representations were false or misleading”, with the potential to deceive customers under Australian Consumer Law.
ACCC response to Fitbit fine
Australian Consumer Law is broad in scope. Consumer guarantees are separate from warranties, and refer to the right when purchasing goods and services to expect a certain level of quality that’s fit for purpose. Acting ACCC Chair Catriona Lowe was pleased with the Federal Court’s findings, especially considering it’s the second time Fitbit has fallen afoul of the consumer watchdog.
“In this case, consumers may have incurred additional expense and inconvenience paying for repairs or replacement products because they were told false and misleading information about their consumer guarantee rights,” Lowe said.
“All products sold to consumers come with a guarantee that goods are of acceptable quality, and retailers must provide a remedy for faulty goods if this guarantee has not been met, which includes repair, replacement or refund, depending on the circumstances.”
The news comes soon after Maurice Blackburn Lawyers launched a class action against tech retailer JB Hi-Fi, alleging that its extended warranties were of “little to no value”. The ACCC has not commented on this case specifically but reinforced businesses’ obligations to customers in general.
“We took this action as a reminder to Fitbit, and other businesses, that they must honour their customer’s consumer guarantee rights without restrictions and not mislead consumers about these rights,” Lowe said.