Tech Giant Admits Fault in Deceptive Practices; Faces Hefty Penalty for Misleading Claims
In a landmark ruling, the Federal Court of Australia has ordered Fitbit, the popular tech and fitness tracking company now owned by Google, to pay an $11 million fine for misleading consumers about the functionality of its smart watches and fitness trackers. The court issued the penalty on Tuesday after Fitbit admitted to making false claims to 58 customers between 2020 and 2022.
The Australian Competition and Consumer Commission (ACCC) brought the case against Fitbit, citing concerns about the company’s warranties and representations regarding consumer rights. This marks the second legal battle between Fitbit and the ACCC, with the previous one in 2018 raising similar concerns about warranty practices.
Fitbit’s misleading claims included erroneous statements about return policies, with representatives wrongly informing customers that they only had 45 days to return a faulty device. The court also found instances where customers were denied refunds based on the expiration of a two-year warranty, even though they had reported problems within the warranty period.
Acting ACCC chairwoman Catriona Lowe emphasized that all goods sold in Australia must meet acceptable quality standards and be fit for their intended purpose. She stated, “We took this action as a reminder to Fitbit and other businesses that they must honor their customers’ consumer guarantee rights without restrictions and not mislead consumers about these rights.”
As part of the case, Fitbit admitted to its staff misleading 18 customers about the 45-day return policy and denying refunds to 40 customers due to the expiry of a two-year warranty. Ms. Lowe expressed hope that this case would serve as an example for other businesses and consumers.
This legal action follows Fitbit’s agreement in 2018 to extend warranties for Australian consumers after facing criticism for offering only one-year warranties initially. Fitbit now adheres to a two-year manufacturer’s warranty in compliance with Australian law. The $11 million fine serves as a stern warning to companies engaging in deceptive practices and underscores the importance of transparency and adherence to consumer rights.
