Warehouse fined record $20,000 for selling unsafe bicycles
14 July 1995
The Warehouse has been fined $20,000 after admitting selling unsafe bicycles despite an earlier warning from the Commerce Commission. The case was heard in the Auckland District Court today.
This is the largest fine yet imposed under the product safety standards enforced through the Fair Trading Act.
Commission Fair Trading Manager Keith Manch said people who have bought Pacific Fitness bicycles should check them to ensure that brakes, handlebars and wheels are safe.
Mr Manch said business people must be aware that it is their responsibility to prevent unsafe goods being sold. If they do not, and especially if they ignore warnings, they can face big penalties.
Judge Cadenhead said that it did not take too much imagination to see that in the hands of a young person the bicycles could have caused a serious accident.
Just before Christmas 1993 a Commission investigator bought a Pacific Fitness bicycle from the Warehouse in Balmoral, Auckland. The front and back brakes did not work, the handlebars were loose and the wheel nuts on both wheels were loose.
The Warehouse issued a media release urging customers to check Pacific Fitness bicycles and return them if they needed attention.
Three weeks later Commission investigators bought a Pacific Fitness bicycle from the Warehouse in Johnsonville, Wellington. The bicycle had loose brakes, loose handlebars and loose wheels.
A Warehouse bicycle mechanic tried to fix the faults. The bicycle was taken to a testing laboratory where it failed some of the safety tests. All the tests were not carried out because the bicycle was considered too unsafe for laboratory staff to ride.
The bicycle bought in Balmoral was also tested and also failed to meet the safety standard.
In 1993 16,000 bicycles were sold by the Warehouse. It is unknown how many did not comply with the safety standard. Both the Commission and the Warehouse publicised the need to have Pacific Fitness bicycles checked when the first faulty one was discovered.
Judge Cadenhead imposed fines of $10,000 for each bicycle, and court costs of $95 and solicitors' costs of $150.
Media contact:Manager Fair Trading, Keith Manch
Phone work (04) 498 0908, home (04) 479 7105
Communications Officer, Vincent Cholewa
Phone work (04) 498 0920, home (04) 479 1432
The Commerce commission enforces the Commerce Act and the Fair Trading Act.
There are three product safety standards made compulsory by the Fair Trading Act They are for:
- bicycles intended for road use
- fire safety of children's nightclothes
- toys for children aged up to three years (to prevent choking)
Other recent action by the Commission includes:
- a company was fined $10,555 for selling dangerous rattles
- a company was fined $4,000 for selling children's nightclothes with no fire danger warning labels
- more than 20,000 garments were recalled because they failed fire safety standards for children's nightclothes
- a chain of family restaurants entered a settlement with the Commission after giving away unsafe toys
- a toy store, part of a franchise chain, entered a settlement with the Commission after selling an unsafe toy
The Commission has also put considerable effort into educating business people about the safety standards. As well as publicity, it has held seminars and has worked in particular with nationwide traders.
Since the Pacific Fitness bicycles were bought, the Warehouse has taken considerable steps to improve its systems for checking goods.