Nike and Apple (News - Alert) have reached a settlement in a class-action lawsuit that claims that the Nike FuelBand, a wearable fitness tracker that was developed in conjunction with Apple, does not perform as advertised. The central allegations to the suit are that the FuelBand cannot track steps or calories burned as accurately as claimed, and also that Nike violated the terms of the product’s warranty. As per the terms of the settlement, consumers who purchased a FuelBand between January 19, 2012 and June 17 of this year are entitled to either a $15 cash payout or a $25 gift card from Nike.

The Nike FuelBand sells itself as a health and fitness tracker in the same vein as the Fitbit or Jawbone UP. It acts as a pedometer, measuring steps taken, speed, and calories burned, among other statistics, and shares that information by syncing with a smartphone application to give users feedback about their health habits. The lawsuit alleges that this information is likely not at all accurate. Although Nike and Apple did elect to settle this suit outside of a court of law, they maintain a denial of wrongdoing and claim that they wished to settle out of court only to avoid a lengthy and expensive legal proceeding.

Despite this claim by Nike, questions are still being raised about the security and accuracy of wearable technology. Especially in wearable tech that is aimed at health and wellness, making sure that the information generated is accurate and protected is of utmost importance, especially as these devices become more and more innovative. Jay Sales, an Innovation Strategist at VSP Global, will be leading a discussion on this very topic at our Wearable Tech Expo in Las Vegas this August (18^th-20^th). This idea of making wearable tech devices more accurate and secure needs to be a central one as development in the industry moves forward.

While this settlement seems like a blow for the Nike FuelBand, TMC (News - Alert) contributor Peter Bernstein says: “Settling fraudulent advertising claims before they go to court without an admission of wrong doing is the rule rather than the exception in the U.S. for a host of reasons. Realities are, especially in a social media world where vendor claims can quickly be aimed by disgruntled consumers, this may be the best way to assure what is promised is delivered.”  In the same breath, however, consumers must take all the information they have access to into account when making a purchase. “Buyer beware,” Bernstein says. Consumers must be “diligent in researching their purchases.”