Prosecution Considered Against King Cargo

Issued 10 January 2002/002

Commerce Commission considers prosecution if King Cargo fails to honour its undertakings on recalling and repairing bicycles that do not meet the safety standards

The Commerce Commission will consider taking legal action against itinerant trader King Cargo Limited if it does not honour its agreed undertakings over the recall of bicycles that do not comply with the New Zealand and Australian safety standards for bicycles.

A Commerce Commission investigation in late December found that 34 Trans brand BMX and mountain bikes on sale by King Cargo did not meet the required safety standards. Failure to comply with the standards is a breach of section 30 of the Fair Trading Act.

King Cargo company director Stuart Connell undertook to recall the bicycles, and to replace or repair any bicycles that did not comply with the safety standard.

Since then, the Commission has received calls from frustrated customers who purchased bicycles from King Cargo who say they have been unable to make contact with Mr Connell.

Mr Connell was selling the bicycles from a temporary shop set up in Masterton, and the Commission understands a second shop was set up in Levin.

Commerce Commission's Director of Fair Trading Deborah Battell said the Commission was compiling as much information as possible from unhappy customers, and was attempting to make contact with Mr Connell. The Commission understands Mr Connell is no longer contactable at King Cargo's registered address in Lower Hutt.

"We are aware of the difficulties that consumers are experiencing in trying to get hold of Mr Connell," said Ms Battell. "The Commission will continue on behalf of the customers to make contact with Mr Connell or his legal representatives for an explanation.

"If we believe he has not honoured his undertakings, we will consider taking legal action against Mr Connell and King Cargo under the Fair Trading Act."

The Commission is aware of one King Cargo customer who has contacted her bank to cancel her credit card debit for a bicycle purchased before Christmas.

Ms Battell added this situation was an important reminder to consumers that they must be careful when purchasing items that are required by law to be of a certain standard and quality.

"It goes without saying that when safety is involved, we should all be extra vigilant in asking lots of questions about the goods and we should be satisfied that the goods are safe. There should be no compromise when safety is involved," said Ms Battell.

Background A Commerce Commission investigation found that 34 Trans brand bicycles on sale at a retail outlet set up King Cargo Limited, did not comply with the New Zealand and Australian safety standards for bicycles. Failure to comply with the standards is a breach of section 30 of the Fair Trading Act.

An inspection revealed six breaches of the safety standard. Of particular concern was that the front brake levers were not situated on the correct side (the right hand side) of the handlebars, and that the bicycles were supplied without an owner's manual.

The Commission also considered that, under the new bicycle standards that were introduced in October 2001, these bicycles should have carried labels that stated the bicycles were not suitable for off road use.

The retail outlet was set up in the ANZ Building on the corner of Queen and Bannister Streets, Masterton. The Commission understands that King Cargo Limited also supplied bicycles in Levin.

Note: the Commerce Commission has a Trans BMX girls bicycle purchased from Mr Connell available at its Wellington offices.

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