The ACCC has issued proceedings in the Federal Court against Thermomix In Australia Pty Ltd (Thermomix), alleging it contravened several provisions of the Australian Consumer Law (ACL) in relation to its Thermomix appliances.
Thermomix is marketed as an ‘all-in-one’ kitchen appliance and has been a huge worldwide success. Thermomix conducted a voluntary recall in October 2014 for its TM31 model after the discovery of a safety concern which could cause burns or scalding to the user.
The ACCC has alleged that Thermomix breached the ACL by misleading customers about their consumer rights, failing to comply with mandatory reporting requirements for injuries arising from the use of the appliance, making false representations, and engaging in misleading conduct regarding the safety of the TM31 model and its 2014 recall.
Thermomix is accused of misrepresenting to consumers that the ACL remedies (which they were entitled to) could only be obtained if the customer signed a non-disclosure agreement and other terms that prohibited them from disparaging the Thermomix brand. The ACCC also alleges that Thermomix represented to customers that it would not provide refunds or replacements at any time. Under the ACL, businesses cannot restrict, alter or remove consumer rights in relation to defective products or make representations to that effect.
Finally, the ACCC claims that Thermomix engaged in misleading conduct by representing to consumers that it was not aware of any safety issue with the TM31 by continuing to supply the TM31 without disclosing the safety defect after the 2014 recall.
This action highlights the various ACL requirements businesses need to consider if they sell a consumer product with a safety defect. These include: conducting voluntary safety recalls, ensuring consumer guarantee claims are handled (and resolved) appropriately, and complying with the mandatory reporting requirements for suppliers to notify the ACCC if they become aware that their consumer product has injured a person.
The outcome of this case could be significant for businesses as it may finally provide some guidance about the use of non-disclosure agreements when resolving customer disputes that involve potential breaches of the consumer guarantees. It will also be interesting to see whether the Court upholds the ACCC’s claim that continuing to supply a consumer product, with a known safety defect without disclosing the defect, amounts to misleading and deceptive conduct under the ACL.
CIE Legal assists clients across a wide range of industries in managing their ACL compliance obligations in relation to product safety and the consumer guarantees. We help businesses prevent contraventions of the ACL by developing internal processes, conducting compliance training, and by giving strategic advice to businesses that have a consumer product safety issue, including in response to complaints by a customer or regulators. Please contact us if you need assistance.
More information about the ACCC proceeding can be found here.
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