Product recall obligations for consumers, retailers and suppliers

Stephen Booth, Peter Stewart

Stringent safety standards bind all manufacturers, particularly in developed countries like Australia. However, sometimes consumer goods or products slip through this net, occasionally with disastrous consequences!

One such instance that’s hot in the news at the moment is the recall of cars manufactured with Takata airbags, currently affecting a wide range of cars produced by Chrysler, BMW, Honda, Mazda, Nissan, Performax, Subaru and Toyota. The issue prompting the recall is a defect which could result in the airbags rupturing and sending debris throughout the car – to date, no injuries have been reported in Australia. 

Consumers of other products haven’t fared as well – take the recall that Fantastic Furniture was forced to undertake of its popular Worx chairs – after two people lost toes due to a design fault. It’s estimated over 100,000 of the chairs had already made their way into homes around Australia.

Hoverboards are more in the category of fun than an everyday chair but nonetheless, they too fell foul of the Australian Competition and Consumer Commission (ACCC) earlier this year. The popular devices were banned from sale in March of this year following several cases of boards bursting into flames after over-heating.

What do I do as a consumer?

Stop using the product immediately if you become aware of any safety defect. You may want to check to see if there has been any recall  of that product. 

You have rights under the Australian Consumer Law to obtain a refund or replacement if you’ve purchased consumer goods which are deemed unsafe or defective. A good first step is to contact your supplier about the issue to see if they will offer a solution. However, if their response isn’t reasonable you can contact the ACCC, NSW Fair Trading or seek legal advice on how to proceed. 

What do I do as a retailer? 

If you become aware of a safety defect in a product it may be useful to get in contact with your supplier and see whether the product has passed safety standards. If you realise that a product has been recalled than you should stop selling it immediately. 

If the product doesn’t meet safety standards you’re obligated to provide any customers who have purchased the item with a refund or replacement that meets the relevant standards. You can contact the Australian manufacturer of the goods to seek reimbursement of this cost. 

Depending on your contract for supply you may be able to return the stock as not being of acceptable quality.

What do I do as a supplier?

Under the Australian Consumer Law, where a product is a consumer product and the supplier becomes aware that the product will or may cause injury to a person or that a reasonably foreseeable use of the product may cause injury to any other person or that the product does not comply with the relevant safety standard, there is an obligation on the supplier to take effective action (generally a product recall) and to notify the Commonwealth Minister within two days of taking action to recall the products.

If you have any questions regarding your obligations for dealing with safety defects and product recalls please contact: 

Peter Stewart, Principal
Phone: +61 2 9895 9258
Email: pstewart@colemangreig.com.au 

Stephen Booth, Principal
Phone: +61 2 9895 9222
Email: sbooth@colemangreig.com.au