Apple has been hit with a new lawsuit that alleges its iPod nanos aren't up to scratch.

US consumer group the Foundation for Taxpayer and Consumer Rights has launched legal action that claims the iPod nano can't handle normal use and that the company is refusing to offer refunds for the "defective device".

"Apple Computer's iPod nano music player, marketed for its sleek beauty, cannot withstand normal use without becoming severely scratched, often to the point where its screen is unreadable," the complaint alleges.

"Apple is refusing to give refunds to purchasers who bought the defective product, while forcing others to pay a $25 fee to get a replacement that is supposed to be 'free' under Apple's warranty," the complaint continues.

"Merely carrying the device in a pocket, a use expressly advertised by Apple, causes cracks, streaks, scratches and scuffs that make text displayed on the screen difficult to read or illegible," it reads.

The lawsuit demands that Apple recalls and replaces defective units free of charge, or even refunds the purchase price to unhappy consumers.