Finance Consumer Exploding airbags and deadly batteries: Five of Australia’s biggest consumer scandals
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Exploding airbags and deadly batteries: Five of Australia’s biggest consumer scandals

There have been 24 reported deaths and more than 300 injuries due to faulty Takata airbags. Photo: AAP
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From Takata’s killer airbags to button batteries and Apple’s ‘error 53’, Australian consumers have been besieged by unsafe products and unscrupulous behaviour over the past two years.

A new report by Consumer Affairs Australia and New Zealand (CAANZ) catalogues the extensive consumer harm caused by scandals involving some of the world’s biggest companies in 2017-18.

More than $282 million was awarded in compensation to consumers, and more than $47 million paid out in community benefit payments to address misconduct during that period.

Consumer law-related compliance and enforcement actions in 2017-18. Photo: CAANZ

In addition to naming and shaming some of the worst offenders, the report detailed the policy, education and enforcement activities under way to “improve consumer wellbeing” through “empowerment and protection”.

Five of Australia’s biggest consumer scandals

Compulsory Takata airbag recall

Airbag manufacturer Takata caused a safety scandal on a scale rarely seen, with the company’s exploding airbags causing death, injury, and the recall of millions of affected cars in Australia and around the world.

Worldwide, there have been 24 reported deaths and more than 300 injuries associated with faulty Takata airbag inflators.

In Australia there has been one death and one serious injury reported as a result of defective Takata airbags.

A national ad campaign raised awareness of the issue. Photo: CAANZ

The airbags were found to contain a chemical that can explode with too much force when exposed to heat and humidity over time, blowing apart a metal canister and propelling metal fragments into the car, potentially injuring or killing vehicle occupants.

The Takata airbag recall is the world’s largest automotive recall and “the most significant compulsory recall in Australia’s history”, with more than four million affected airbag inflators in more than three million vehicles recalled, CAANZ said.

The Australian Competition and Consumer Commission (ACCC) began a safety investigation into the airbags in August 2017, with a compulsory recall and replacement order issued in February 2018.

The high number of affected vehicles means that the recall and replacement process is expected to continue until December 2020.

Deadly button batteries

Button batteries can burn flesh and can be deadly if ingested. Photo: AAP

Consumer advocates are waging an ongoing campaign against deadly ‘button batteries‘, accusing major retailers of ignoring product safety risks and putting children at serious risk of injury and death.

Around 20 children visit an emergency department in Australia each week following suspected ingestion of a button battery, which can burn through soft tissue and cause serious injury and death in as little as two hours. 

There have been two deaths from button battery-related injuries in Australia.  

“Regulators continue to work collaboratively and prioritise efforts to reduce the risk from button batteries,” the CAANZ report said. 

‘Error 53’: Apple fined for misleading iPad and iPhone owners

The consumer watchdog took the world’s most valuable company Apple to court for making false or misleading representations to customers with faulty iPhones and iPads about their rights under the Australian Consumer Law. 

The ACCC’s case related to an update to iPhones and iPads that, in some circumstances, caused an iPhone or iPad that had been repaired by a third party to become inoperable with an ‘error 53’ appearing.

Last June, the company was fined $9 million in the Federal Court for telling at least 275 Australian customers affected by error 53 that they were no longer eligible for a remedy from Apple as their device had been repaired by a third party. 

This violated Australian consumer law, which guarantees a consumer’s right to have a component of a device repaired or serviced by a third party without voiding the manufacturer’s warranty.

$124 million in ‘add-on’ insurance refunds

In 2017-18, corporate watchdog ASIC won $124 million in refunds for more than 210,000 consumers who were sold ‘add-on insurance‘ of little or no value in car yards. 

“Add-on insurance is sometimes offered to consumers purchasing a new or used car to cover risks to the car, such as tyre and rim insurance, or consumer credit insurance,” CAANZ said.

ASIC pursued insurers including Allianz, Swann Insurance, Suncorp, QBE for designing and selling add-on insurance that was “expensive, of poor value and provides consumers very little or no benefit”.

Thermomix slapped with huge fine

Kitchen appliance manufacturer Thermomix was found to have misled the public. Photo: AAP

In April 2018 kitchen appliance manufacturer Thermomix was ordered to pay more than $4.6 million in penalties for making false or misleading representations and misleading the public in relation to its appliances.

The Federal Court found that Thermomix had stayed silent on a safety issue affecting its TM31 appliance that the company knew about.

The company knew from July 2014 that there was a potential risk of injury to users caused by the lid lifting and hot food and/or liquid escaping from the mixing bowl, with 14 injuries reported.