Fitbit misled consumers with ACCC claiming another scalp

Enforceable undertaking will see Fitbit update website terms and alert users of upcoming Fitbit Premium payments.
Written by Chris Duckett, Contributor

The Australian Competition and Consumer Commission (ACCC) has continued its streak of pinning vendors for misleading consumers, with Fitbit becoming the latest vendor to fall.

According to the ACCC, the wearable company told consumers between November 2016 and March 2017 that warranty for faulty products existed for a year, and that faulty products would only be replaced for "the remainder of the calendar year or 30 days, whichever was longer".

Fitbit has now signed onto an enforceable undertaking, has extended its express warranty to two years, and will now warn Australians when a Fitbit Premium payment is about to occur, rather than automatically renewing it without notice.

"Fitbit has acknowledged that it may have breached the law by misrepresenting what customers were entitled to for faulty products," ACCC Commissioner Sarah Court said.

"If a business offers its own limited express warranty, they must make it clear that the warranty is in addition to the remedies available under the Australian Consumer Law consumer guarantees, not instead of them."

The consumer watchdog has been hitting companies regularly for misleading consumers in recent times.

Last month, Optus was ordered to pay AU$1.5 million in penalties by the Australian Federal Court, after having been found to make misleading representations to its fixed broadband customers about their shift to the National Broadband Network hybrid fibre-coaxial service.

The ACCC had alleged that between October 2015 and March 2017, Optus advised its customers in writing that they would be disconnected from the Optus HFC network within a specified period due to the availability of NBN in their area.

Optus had benefited by approximately AU$750,000 due to the conduct, according to the ACCC.

The ACCC has also forced Telstra, TPG, iiNet, Internode, Dodo, iPrimus, and Commander to compensate tens of thousands of customers for not providing them with the NBN speeds they were paying for.

Also in May, HP PPS Australia and the ACCC entered into an enforceable undertaking for the wholly owned subsidiary of HP to refund customers AU$50, after the company installed technology on around 220,000 printers to prevent non-HP ink cartridges from being used without telling consumers.

In October, MSY Technology was fined AU$750,000 for misleading consumers in regards to faulty products, after the ACCC dragged MSY to Federal Court.

ASIC using ACCC powers to go after scammy ICOs

Thanks to a referral of powers from the ACCC, the Australian Securities and Investments Commission (ASIC) is able to address initial coin offerings (ICO) with what commissioner John Price says isan ability to "cover the field" like no other regulator.

Speaking to Senate Estimates on Wednesday night, Price said the power referral from the ACCC allows it to skirt the issue of whether an ICO is offering a financial product.

"One of the challenges with ICOs is they don't have a set legal structure," he said. "Depending on how they are actually set up, they might be things like a security, they might be like a share, they might like an interest in a collective investment scheme, they could be a derivative, they could be a non-cash payment facility, and indeed they might not even be a financial product."

"So they might fall outside ASIC's regulatory jurisdiction in normal circumstances."

With the powers of referral in hand, ASIC can quickly go after ICO on misleading or deceptive conduct.

"ASIC will be able to take action if the disclosure around that product -- either formal discourse or promotional material -- is misleading or deceptive," Price added.

"I think what consumers really care about is they are getting honest and fulsome information about the product."

Price added that ASIC will not be shy about going after ICOs retrospectively, especially if it can access funds to recompense scammed consumers.

"If there is a product out there and it's being promoted or marketing as an initial coin offering or a cryptocurrency product, and you think it is a scam, please contact us."

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