Power Balance files for bankruptcy

Posted by By Gary Roethenbaugh at 25 November, at 08 : 54 AM Print

According to the Wall Street Journal, ‘consumers have grown suspicious of Power Balance’s $30 athletic wristbands – which promise to alter the body’s natural energy flow to make it stronger, well-balanced and more flexible – leading sales to plummet and prompting the company to file for Chapter 11 bankruptcy protection.’

Earlier this year, Power Balance, was sued by its customers who alleged that Power Balance falsely claimed that its bracelets improved athletic performance. The class-action suit was brought by consumers who claimed they were tricked into believing the hologram-embedded band improved balance, flexibility and strength. There was, however, no evidence to back up those claims.

The tipping point towards bankruptcy appears to be a settlement filed in September in a federal court in Los Angeles. Under the terms of the settlement, which is yet to be finalized, anyone who bought a wristband would be eligible for a refund of the US$30 purchase price, plus US$5 for shipping.

According to a report in the Sacramento Bee, the settlement could cost Power Balance US$57.4 million.

Last year, Australian Competition and Consumer Commission ordered Power Balance to admit there was ‘no credible scientific evidence that supports’ claims that the wristbands improve athletic performance.

www.powerbalance.com

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