AusLeisure

Wearable fitness technology company Fitbit LLC has been ordered by the Federal Court to pay penalties of $11 million after misleading consumers about smartwatches and fitness trackers that were not fit for purpose.

The Court ordered the penalty for the Google owned business for making false, misleading or deceptive claims to 58 customers who, between 2020 and 2022, had sought replacements or refunds when devices proved faulty.

The case is the second brought against Fitbit by the Australian Competition and Consumer Commission (ACCC) after it raised concerns about warranties offered by the company in 2018.

The ACCC launched its latest case against the Fitbit in October last year, saying it had misled customers about their rights under Australian consumer law.

Commenting on the case, ACCC acting Chair, Catriona Lowe stated “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.

"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."

Fitbit admitted that between about November 2020 and February 2022, its customer service staff told 40 consumers they did not have a right to a replacement product because Fitbit’s two-year ‘warranty period’ had expired.

Of those 40 consumers, 39 had contacted Fitbit about a problem with a replacement product, but customer service staff had said the warranty was for the original device and had expired.

The Fitbit customer service representative agreed the new device was defective but informed the customer that they were not eligible for a replacement, advising "your device does not meet the requirements for a replacement ... based … on the original purchase date."

Fitbit - which was acquired by Google in January 2021 - also admitted that between May 2020 and February 2022 its staff had told 18 other consumers they did not have a right to a refund unless they returned the faulty product ‘within 45 days of purchase’.

Fitbit admitted that its representations were false or misleading, and that they constituted conduct that was misleading or deceptive conduct, or likely to mislead or deceive.

Lowe said she hoped the case served as an example for businesses and consumers, adding “we are pleased Fitbit admitted its misconduct, especially since this is the second time we have had to respond to a company in the Fitbit Group with concerns about representations involving consumer guarantee rights.”

Fitbit now offers a two-year manufacturer’s warranty on its products in line with Australian law.

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