Fitbit Ordered to Pay $11 mn in Penalties for Misleading Consumers About Guarantee Rights

The Federal Court of Australia has ruled that Fitbit, based in the US, must pay penalties amounting to $11 million following its admission of providing false, misleading, or deceptive information to 58 consumers regarding their consumer guarantee rights for refunds or replacements of faulty devices.
Fitbit smartwatch business dealersThis marks the second instance of a Fitbit Group company drawing the attention of the ACCC (Australian Competition and Consumer Commission) due to issues related to consumer guarantee rights.

ACCC’s Acting Chair, Catriona Lowe, in a news statement, has expressed concern over the situation, highlighting the additional expenses and inconvenience faced by consumers who were given inaccurate information about their rights regarding faulty products.

Fitbit acknowledged that its customer service representatives had incorrectly informed 40 consumers between November 2020 and February 2022 that they were not entitled to replacement products after the purported expiration of Fitbit’s two-year ‘warranty period’. Out of these cases, 39 pertained to problems with replacement devices, with Fitbit citing the warranty period of the original device, which had already expired.

In one instance, a consumer reported a defective replacement device provided by Fitbit, but was informed that they were ineligible for a replacement due to the expiration of the original device’s warranty, despite the purchase date being over two years ago.

Additionally, Fitbit admitted that its staff had erroneously informed 18 other consumers between May 2020 and February 2022 that they were not eligible for refunds unless the faulty product was returned ‘within 45 days of purchase’.

For instance, one consumer facing technical issues with their Fitbit device was advised that they did not meet the refund criteria, stating that to be eligible, the device had to be shipped within 45 days and purchased directly from Fitbit’s online store.

Fitbit admitted that these representations were false and misleading, constituting deceptive conduct under the Australian Consumer Law. The law ensures consumer rights, including remedies for faulty goods such as replacements or refunds, which cannot be limited.

Fitbit expressed apologies for its conduct, but the Federal Court noted that the compliance measures established under a 2018 court-enforceable undertaking by Fitbit (Australia) Pty Ltd did not prevent these breaches.

ACCC’s Catriona Lowe emphasized the importance of businesses honoring consumer guarantee rights without restrictions and avoiding misleading consumers. She underscored the significance of Fitbit’s acknowledgment of misconduct, especially given a prior instance where the ACCC addressed concerns regarding consumer guarantee rights within the Fitbit group.