The ACCC took legal action against Thermomix after it emerged that 14 users of its kitchen cooking machine were seriously burned from hot fluids splashing out of the cooker while in use.
Despite knowing from 7 July 2014 that there was a risk of injury from the machine, Thermomix did not notify consumers until more than two months later on 23 September.
During that time, the company continued to market and sell the machine. A voluntary recall of the roughly 105,000 devices in Australia was then issued on 7 October that year.
“By failing to act swiftly and alert consumers about the potential safety hazard with the TM31 appliance, Thermomix misled a number of consumers and placed their safety at risk,” said ACCC commissioner Sarah Court.
As well as selling a product known to have safety concerns, Thermomix also admitted that it breached the law by not reporting the known injuries to authorities.
The ACCC pointed out that businesses have a duty to notify the ACCC within two days of becoming aware of any serious injury resulting from a product they supply.
Thermomix was also brought to task for misleading the media in March 2016 about the nature of the product recall, as well as misleading consumers about their right to a refund.
The court heard that some consumers were wrongfully told they are not entitled to a refund or replacement, and, in one case, made a financial remedy conditional on the signing of a non-disclosure agreement to prevent the customer from making negative comments.
“Thermomix’s penalties should serve as a reminder to all businesses that consumers have rights in relation to faulty products which businesses cannot restrict, alter, or remove,” said Ms Court said.
“When a consumer is entitled to a refund or replacement under the ACL, businesses cannot place conditions on that right to a refund or replacement and customers certainly shouldn’t have to sign non-disclosure agreements.”
In addition to penalties worth $4,608,500 and payment towards the ACCC’s costs, Thermomix was also required to publish notices on its website and Facebook page.
Following the judgement, Thermomix announced that it would give a new model to the 9,443 customers who purchased the faulty version during the three-month window in 2014 that notifications were not given.
The company said this new model sells for $2,089.
“Offering a new TM5 to customers who were misled by us not telling them about a potential safety risk between 7 July and 23 September 2014 is a big undertaking for Thermomix – and goes well beyond the ACCC and Thermomix in Australia proposed and now Court-approved penalty. However, it is the right thing to do,” said Grace Mazur, the founder and managing director of Thermomix in Australia.
“It is clear we should have done better in how we managed complex issues over the past few years. As a fast-growing local company, aspects of what happened then were not good enough. We regret this very much, are sorry, and apologise to those who were affected.”
Mrs Mazur added: “We have learnt a lot, have evolved as a company in the years since then, and would never make these mistakes again.”
Affected customers will be contacted directly by Thermomix.