Penalties for allegedly selling or advertising recalled cars with dangerous Takata airbags

Three corporations, Grays Ecommerce Group Limited (Grays), Berwick Motor Group Pty Ltd (BMG) and HG Innovations Pty Ltd (HG Innovations), have paid penalties totalling $63,000 after the ACCC issued infringement notices against each business for allegedly selling or advertising vehicles under active recall as part of the Takata compulsory recall of vehicles fitted with defective Takata airbags.

BMG and HG Innovations have each paid a penalty of $12,600 after the ACCC issued each of them with one infringement notice for selling a vehicle under active recall. Selling vehicles under active recall is prohibited by the Takata Compulsory Recall Notice and the Australian Consumer Law.

In the case of BMG, the ACCC had reasonable grounds to believe that BMG, through its agent Grays, sold a 2003 Nissan Pulsar vehicle which was under active recall and contained a high risk alpha airbag. The ACCC was particularly concerned about this alleged conduct, as Alpha airbags have a very high risk of rupture, which can cause serious injury or death.

“All consumers should check if their vehicles are subject to the Takata Compulsory Recall. If your vehicle has an Alpha airbag, you must stop driving immediately and contact the vehicle manufacturer or your dealer,” ACCC Deputy Chair Delia Rickard said.

The ACCC also had reasonable grounds to believe HG Innovations, through its agent Grays, supplied a 2005 BMW 3 vehicle which was under active recall.

In addition, Grays has paid penalties totalling $37,800 after the ACCC issued three infringement notices to Grays. The ACCC had reasonable grounds to believe that Grays had made false or misleading representations by advertising three vehicles for sale that were under active recall: a 2003 Nissan Pulsar, a 2005 BMW 3 and a 2002 Honda Jazz.

“We allege that by advertising these vehicles for sale, Grays made false or misleading representations to consumers that the vehicles were of saleable quality, when that was not the case because they were under active recall,” Ms Rickard said.

“These penalties are a reminder that it is in breach of the Australian Consumer Law to sell or advertise for sale vehicles with defective Takata airbags that are under active recall.”

“Consumer safety is one of the ACCC’s highest priorities and businesses are on notice that the ACCC takes alleged breaches of the Australian Consumer Law of this kind very seriously.”

More information about the Takata compulsory recall can be found on the Product Safety Australia website.

Consumers can check if their vehicle is under active recall by searching the vehicle identification number (or ‘VIN’), on the vehicle manufacturer’s website or the Product Safety Australia website.

They can also check if their vehicle is affected by entering their vehicle registration number at IsMyAirbagSafe.com.au or by texting ‘Takata’ to 0487 AIRBAG (247224).

Background:

  • Under the Australian Consumer Law, if a recall notice for consumer goods is in force and identifies a defect in, or a dangerous characteristic of the consumer goods, a person must not supply consumer goods which contain that defect or have that dangerous characteristic.
  • On 1 March 2018 the Consumer Goods (Motor Vehicles with Affected Takata Airbag Inflators and Specified Spare parts) Recall Notice 2018 commenced.
  • Under this compulsory recall notice, suppliers of second-hand vehicles must check the vehicle identification number and other recall information for each second-hand vehicle in their possession to find out if the vehicle is under active recall or subject to future recall.
  • If a vehicle is under active recall by a vehicle manufacturer, supply of the vehicle is prohibited under the recall notice. It is also a contravention of the Australian Consumer Law to make false or misleading representations in relation to the supply of vehicles in these circumstances.
  • Active recall means that the vehicle manufacturer has initiated the recall of the vehicle for replacement of its defective Takata airbag under the recall notice.

Notes to editors:

The payment of a penalty specified in an infringement notice is not an admission of a contravention of the Australian Consumer Law. The ACCC can issue an infringement notice where it has reasonable grounds to believe a person or business has contravened certain consumer protection laws.

Grays is an online auctioneering and valuation business.

BMG operates as a new and second-hand vehicle dealer in Victoria.

HG Innovations is a second-hand vehicle dealer and operator of ride share businesses based in Queensland.

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