Fitbit, the renowned fitness brand, is facing substantial penalties, totaling $11 million, as Australia's Federal Court found the company guilty of disseminating 'false, misleading, or deceptive representations' to consumers regarding their entitlement to refunds for allegedly defective devices. The court ruling, issued on Tuesday, stemmed from incidents occurring over an 18-month period between November 2020 and February 2022.
The court ordered Fitbit, a US-based company now owned by Google, to pay the penalty after it was revealed that the company's customer service representatives erroneously informed 40 customers that they did not possess the right to receive a replacement product. Fitbit's staff mistakenly asserted that the two-year 'warranty period' had lapsed, leading to the denial of replacements for these customers.
Within this group of 40 consumers, 39 had contacted Fitbit regarding issues with replacement products. In these instances, Fitbit incorrectly conveyed that the warranty duration aligned with the original device, which had already expired. Additionally, Fitbit admitted that 18 other customers were wrongly informed that they could only be eligible for a refund if they returned the faulty product 'within 45 days of purchase,' a statement the company later acknowledged as false.
Acknowledging the gravity of its misrepresentations, Fitbit admitted that its actions were misleading and deceptive, constituting a breach of consumer trust. The company, known for its health and fitness devices, including wearable trackers, expressed regret for its conduct.
Acting ACCC Chair Catriona Lowe emphasized the significance of consumer guarantee rights, noting that all products sold to consumers are guaranteed to be of acceptable quality. Retailers, including Fitbit, are obligated to provide remedies such as repair, replacement, or refund for faulty goods based on the circumstances.
The ACCC spokesperson highlighted the potential impact on consumers, suggesting that some may have incurred additional expenses and inconveniences due to misinformation about their rights. Despite Fitbit's apology and previous compliance measures, the Federal Court noted that the 2018 court-enforceable undertaking did not prevent the recent breaches.
Fitbit, now under Google's ownership, finds itself grappling with significant financial penalties and reputational damage as a result of its admission to making deceptive representations about consumer rights in Australia.