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Nike, Apple agree to $2.4M settlement in suit over false FuelBand claims, Apple to pay nothing

Consumers who purchased a Nike+ FuelBand between 2012 and 2015 might be eligible for a small payment from Nike after the sports brand, alongside co-defendant Apple, agreed to settle a class action suit alleging the companies falsely advertised the device's health tracking capabilities.

Disclosure: The author of this report is potentially eligible for payment as a member of the class.

Under agreed upon terms reached in June, Nike will dish out up to $2.4 million to customers who purchased a FuelBand product anytime between Jan. 19, 2012 and June 17, 2015 to settle a class action suit first leveled against itself and Apple in 2013. Although it was named as a defendant, Apple bears no responsibility or liability for attorneys' fees or costs.

Plaintiffs, led by class representative Carolyn Levin, allege Nike's erstwhile FuelBand is unable to live up to advertisements touting the ability to accurately track calorie burn, steps and overall activity represented a conceptual "NikeFuel" readings. The suit claims both Nike and Apple knew of these deficiencies yet continued to sell the device to an unsuspecting public.

According to attorneys representing the class, the companies misled consumers by promoting FuelBand in stores, television, online and elsewhere. Apple, for example, sold various FuelBand models in its stores and only stopped sales in March. Since FuelBand was allegedly never capable of performing advertised tracking functions, Nike is also in breach of warranty, the suit asserts.

Notices were sent out to potential class members on Friday via email, providing instructions on how to file settlement claims for either a $15 payment or $25 gift card redeemable at Nike retail and online stores. Those notified also have the option to object or exclude themselves from the settlement.

A fairness hearing is scheduled for Nov. 4 to discuss settlement terms, attorneys' fees and expenses and an award for the class representative. More information can be found through the settlement's website.

Related to the case is Apple's stable of engineers and other employees previously attached to Nike. Fitness guru Jay Blahnik, who consulted on the creation of FuelBand, came on board in 2013 and was later revealed to be a key player in the development of Apple Watch's health tracking functions. Other recent hires include two engineers from Nike's now defunct FuelBand team.

Apple and Nike share a close working relationship after partnering on multiple health related hardware and software solutions dating back to the Nike+iPod sensor kit from 2006. Apple CEO Tim Cook is a known early adopter and even touted FuelBand's capabilities prior to Apple Watch's debut.