Commission prosecutes business over Transforma Ladders

Commission prosecutes business over unsafe Transforma Ladders

Brand Developers Limited (BDL) has been fined $153,000 in Auckland District Court for charges relating to wrongly claiming that its Transforma ladders had a certified load rating of 180kg and for selling ladders in breach of an Unsafe Goods Notice prohibiting their sale.

The case is the first time that the Commerce Commission has prosecuted a company for selling or advertising a product covered by an Unsafe Goods Notice.

The Auckland based company, which also trades as the TV Shop, pleaded guilty to five charges under the Fair Trading Act 1986 (FTA) relating to the sale and advertising of the Transforma brand of multipurpose ladders between March 2010 and March 2013.

In his sentencing Judge Fraser said; "A condign sentence will be imposed when safety is an issue. The Fair Trading Act is as much to protect consumers from physical harm as financial harm."

BDL misrepresented that the TR24 and TR35 Transforma Ladders complied with the Australian and New Zealand Standard for Portable Ladders to a load rating of 180kg when they had not been tested against all parts of the standard at this rating.

BDL continued to advertise and sell the ladders without ensuring that they had been fully tested, even after the Ministry of Business, Innovation and Employment (MBIE) issued an Unsafe Goods Notice preventing the sale of multipurpose ladders that did not meet the standard. When the Commission tested the ladders in early 2013 at a load rating of 180kg, both models failed to meet the standard. One ladder became deformed during testing and the testing had to be abandoned.

Commissioner Anna Rawlings says that although the ladders were first introduced to the market with a load rating of 120kg, by the time BDL was trading in March 2010, the load rating on the ladder labels had changed to 180kg.

“BDL’s conduct put the safety of consumers at risk. The 180kg load rating provided a point of difference in advertising the ladders but BDL did not carry out the required testing to ensure that the ladders were safe to use at that weight. And they weren’t.”

“The MBIE issued the Unsafe Goods Notice because it considered that multipurpose ladders that didn’t meet the standard were, or could be, unsafe. But BDL continued to advertise and supply the ladders even though they had not been tested to make sure that they complied and could legally be sold.”

BDL sold approximately 7,800 ladders directly to consumers through infomercials and to New Zealand suppliers. Advertisements for the Transforma ladders were shown on various television channels and claimed that ‘the ladder meets or exceeds New Zealand safety standards for portable ladders’ and that ‘it is rated to a whopping 180kg.’ Labels on each ladder also incorrectly said that the ladder was ‘rated industrial and is designed to carry a maximum load of 180kg.’

In March 2013, with oversight from Trading Standards which is part of the MBIE, BDL commenced a programme notifying purchasers of the issues. It contacted all customers who had purchased the ladders directly from BDL to inform them that the load rating had been downgraded to 120kg and provided refunds where requested.

“It is important that consumers can rely on the information they are provided about the safe use of products that they buy, and an Unsafe Goods Notice is intended to protect New Zealanders from harm. The fine in this case demonstrates that traders can expect significant penalties if they do not take product safety seriously,” Ms Rawlings said.

Background
The 180kg rating issue only applies to Transforma ladders sold prior to January 2014. Consumers who have concerns about whether their ladder is affected, can call the TV Shop on 0800 008 666.

Brand Developers Limited is an Auckland based company which also trades as ‘The TV Shop’. On its website it describes itself as “Australasia’s leading Direct Response Television Company specialising in product development, infomercial shopping and multi-channel retail distribution. Operating from offices in Auckland New Zealand and Melbourne Australia, Brand Developers Limited continues to push the boundaries of traditional home based TV shopping.”

Section 31(1) of the Fair Trading Act (FTA) provides the ability for the Minister of Consumer Affairs to declare, by notice in the Gazette, goods to be "unsafe goods" where it appears to the Minister that those goods will or may cause injury. The mandatory considerations of the Minister in determining whether goods will be declared unsafe, as set out in s 31(1B) of the FTA include:

• the likelihood of injury occurring as a result of the reasonably foreseeable use or misuse;

• the seriousness of the injury likely to be suffered;

• likely frequency of such injury; and

• any steps taken to mitigate the risk of injury

On 22 November 2012, the Minister of Consumer Affairs issued an Unsafe Goods Notice declaring multipurpose ladders that did not comply with Australian and New Zealand Standard for Portable Ladders (metal), AS/NZS/1892.1 to be unsafe goods. Following a consultation, the Minister made a decision to prohibit these multipurpose ladders indefinitely and issued an Indefinite Prohibition Notice.

ENDS

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