US smartwatch company FitBit must pay an $11 million fine for telling Australian customers that they weren’t eligible for refunds and replacements of faulty devices, the Federal Court ruled this week.
The Australian Competition and Consumer Commission (ACCC) took FitBit to court last year for misleading people about their consumer rights after the US company, which Google owns, told customers they weren’t able to replace or return faulty watches in contravention of Australian Consumer Law.
“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,” said acting ACCC chair Catriona Lowe.
“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’s representatives had told 18 Australian buyers that they could only return devices within 45 days, as per company policy, but local consumer protection lets people seek refunds for a major failure within a “reasonable period” of time.
Similarly, the FitBit’s support staff told 39 people whose replacement devices were broken that they couldn’t get another replacement because the company’s two-year warranty period only covered the original device.
The two instances resulted in $4 million and $7 million fines respectively.
According to the Federal Court judgement, FitBit offered a contrite apology and pleaded that it hadn’t deliberately mislead customers about their rights.
Lawyers for the ACCC accepted that the breaches weren’t a result of “deliberate disregard of the Australian Consumer law, but were rather the product of a lack of focus or inadequate training of the customer service representatives who had engaged with the consumers in question”.
Lowe said the ACCC took its case against FitBit to set an example to other companies that they can’t just ignore consumer rights.
“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,” she said.
Back in 2018, the consumer watchdog flogged FitBit’s Australian arm for similar conduct after it told customers they only had a limited one-year warranty period for faulty products.
That resulted in FitBit extending its manufacturer’s warranty to two years as part of a court enforeable undertaking to provide better information to customers and improve its staff training.
Warranties for tech products can be a sticking point for manufacturers and resellers alike.
Retail brand JB Hi-Fi is currently facing a class action lawsuit for selling warranties that lawyers have labelled as ‘junk’ that fail to offer anything more than is already provided for under Australian Consumer Law.
