Consider Product Safety this Christmas

With the gift giving season in full swing, it’s important for businesses to consider the safety of the products they sell. Nothing ruins the holiday festivities quite like a trip to Emergency. And dealing with unexpected fallout from a product safety issue can take its toll on business.

Recently, the Queensland Office of Fair Trading (OFT) published the results of its annual children’s Christmas toy safety checks, revealing that 6 toys have been pulled from sale over safety concerns.

Australian consumers enjoy strong, legislated protections around product safety, and businesses need to take care to ensure their products comply with relevant safety standards.

Statutory Protection - Consumer Guarantees

Under the Australian Consumer Law (ACL) all consumer goods come with statutory guarantees. (Consumer goods are goods ordinarily supplied for personal, domestic or household use, or where the value is under the statutory threshold of $40,000). Some exceptions apply, such as goods sold at auction.

Product manufacturers, and in some cases importers, are responsible under the legislation for complying with the Consumer Guarantees and rectifying product safety defects.

The Consumer Guarantees include a guarantee that the goods are of “acceptable quality”. Acceptable quality is defined to include that the goods are reasonably free from defects, durable and safe.

The Consumer Guarantees under the ACL cannot be excluded or modified - even under a contract or ‘terms of sale’. Making a false or misleading statement about a Consumer Guarantee may also amount to contravention of the ACL.

Goods must also conform to any mandatory safety standards declared by the government. These may vary by product type or industry. Products that do not comply may be banned from sale or subject to a compulsory recall notice.

The ACCC and state fair trading bodies have powers to take action against unsafe products, including bans and issuing infringement notices. The ACCC and fair trading bodies can also use the courts to prosecute offenders and seek court orders, enforceable undertakings and pecuniary penalties against offenders.

Steps Businesses can Take

Businesses that manufacture or import goods into Australia can consider taking the following steps:

1. Ensure product liability insurance is up to date and provides adequate coverage
2. Conduct regular product safety testing as part of the product development cycle
3. Consider obtaining standards compliance certification where applicable or required (eg ISO, AS certification)
4. Consider what industry codes or standards might be applicable (eg the Food Standards Code for food products)
5. Ensure product documentation and labels contain appropriate safety warnings and cautions
6. Ensure return policies, product warranties and advertising materials are not misleading and comply with the ACL
7. Consider customer expectations, feedback and experiences
8. Prepare and implement an incident response plan, including consultation with key stakeholders and training for personnel

The above list is not exhaustive, so it is important to obtain specific advice relevant to the industry or product.

Further Information

• ACCC Product Safety website
• Office of Fair Trading (Qld) Statement (30 November 2018) Attorney General Says ‘Ho-Ho-No’ to unsafe Christmas Toys