Pact Fitness App Users Get $940K in Refunds Under FTC Settlement

The FTC has announced a $940,000 settlement with Pact Inc., the maker of a fitness tracking app that charges users money for failing to meet their fitness goals.

The settlement resulted from allegations that defendant Pact Inc.’s app failed to pay rewards as promised to users who reached their fitness goals. The app allegedly charged many users a penalty even after they met their goals or cancelled the service.

Under terms of the Pact app settlement, Pact Inc. and its principals must pony up $940,000 to be distributed among affected Pact app users. That amount is part of a total $1.5 million judgment against Pact, the rest of which is suspended.

Pact Inc. is also prohibited from misrepresenting the conditions under which it will charge or pay consumers. The company is barred from charging consumers without first getting their express and informed consent.

Pact was required to send an email by Oct. 7, 2017 notifying affected app users of their eligibility to receive a refund. Claimants can use the link provided in the email to apply for a refund, or they can go directly to the refund website by clicking here.

Qualifying claimants must claim their refunds by Nov. 2, 2017.

Originally released in 2012, the Pact mobile app is designed to track the user’s fitness and nutritional goals, according to the FTC. Users make a “pact” with themselves to pursue their specific dietary and fitness goals. The Pact app enforces that promise by charging users a penalty of between $5 and $50 per skipped activity. The penalty funds were supposed to be used to cover reward payments to users who met their goals.

But according to the FTC, Pact Inc. charged users tens of thousands of dollars in unwarranted penalties. Users who cancelled their Pact service were allegedly charged penalties for several weeks thereafter.

The FTC says Pact Inc. received tens of thousands of user complaints about erroneous charges. Many users reported being billed hundreds of dollars more than they should have been. One user said the app penalized her after it failed to recognize the athletic facility at the Air Force base where she was stationed. Another reported being billed over $500 in charges after she cancelled her Pact app service.

The company allegedly acknowledged the problem as a “known issue,” yet continued to charge users who reached their goals or cancelled the service, according to the FTC’s complaint. Instead of fixing the problem, Pact Inc. merely added new features and types of pacts that suffered from the same problems.

The FTC alleged Pact Inc.’s actions violated the Federal Trade Commission Act. The Commission also argued that by failing to adequately disclose how consumers could cancel the service, Pact Inc. had violated the Restore Online Shoppers’ Confidence Act.

This Pact app refund lawsuit was brought by FTC attorneys Katharine Roller and Jason D. Schall, under the supervision of Acting General Counsel David C. Shonka.

The Pact App FTC Refund Lawsuit is FTC v. Pact Inc., et al., Case No. 2:17-cv-01429, in the U.S. District Court for the Western District of Washington.