Need to know
- In violation of the ACL, Fitbit informed customers that refunds for faulty product were limited to 45 days
- Under Australian Consumer Law, businesses can’t impose their own refund limits
- The ACCC says “manufacturers should have processes in place that ensure compliance”
The ACCC has launched a court case against the California-based company Fitbit on the grounds that the fitness tracker manufacturer contravened the Australian Consumer Law (ACL) in its communications to customers.
The ACCC alleges that over a nine-month period ending in February 2022, Fitbit wrongly informed customers that they could only get a refund for a faulty product if they returned it within 45 days of purchasing it.
Even worse, the regulator alleges, Fitbit told customers who had received a second faulty device after returning the first one that they wouldn't be supplied a third one if the two-year warranty on the orignal faulty device had expired.
Second ACCC action against Fitbit
It's not the first time the ACCC has had to make it clear to overseas companies that their products are subject to the ACL if sold in Australia, where consumers have the right to choose a refund, replacement or repair in the case of major faults for a reasonable period of time after purchase. Fitbit's 45-day limit would not pass the ACCC's reasonableness test.
We consider the alleged conduct is serious and that manufacturers should have processes in place that ensure compliance with the Australian Consumer LawACCC chair Gina Cass-Gottlieb
It's also not the first time the ACCC has taken action against Fitbit. In May 2018, the company accepted a court-enforceable undertaking that compelled Fitbit to no longer impose refund and replacement restrictions for faulty devices that were inconsistent with the ACL, including telling customers that refunds were not available after a year and that they would have to pay the costs of returning defective products.
"Fitbit has again come to the ACCC's attention for allegedly misleading consumers about their consumer guarantee rights," says ACCC Chair Gina Cass-Gottlieb.
"We are taking this case against Fitbit because we consider the alleged conduct is serious and that manufacturers should have processes in place that ensure compliance with the Australian Consumer Law."
Under the ACL, any product sold in Australia must be of acceptable quality, and companies must provide a remedy if they're not.
"All consumers have these automatic consumer guarantee rights that cannot be excluded, restricted or modified. The consumer guarantee rights exist in addition to any warranties offered by manufacturers," Cass-Gottlieb says.
Global businesses evading the ACL
CHOICE CEO Alan Kirkland says global businesses that have a presence in the Australian marketplace must embrace the ACL.
"Big global businesses like Fitbit need to understand that they can't evade the Australian Consumer Law, so it's great to see the ACCC take them on for misleading consumers about their legal rights," Kirkland says.
Businesses often try to mislead consumers by saying that their warranties only last for a certain period of timeCHOICE CEO Alan Kirkland
"Businesses often try to mislead consumers by saying that their warranties only last for a certain period of time but when it comes to the Australian Consumer Law, those warranties are irrelevant. When a product breaks or stops working, you've got clear consumer guarantee rights, regardless of what the business's warranty says."
The ACCC says it's seeking penalties, injunctions, a compliance program "and other orders".
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