$80k fine for bikes with no brakes
A Hamilton-based online retailer that sold 53 bicycles with no front brakes has been hit with an $80,000 fine and a growling from a district court judge.
The Hang-Ten Cruiser bikes imported by outdoor and sports equipment firm Torpedo7 and sold through its online trading entity 1-Day were deemed so in violation of safety standards that they were ‘‘an accident waiting to happen’’, according to Judge Allan Roberts.
The company pleaded guilty and was sentenced in the Hamilton District Court yesterday morning to two representative charges of breaching the Fair Trading Act.
Between October 4 and November 17, 2017, Torpedo7 – via its 1-Day website – advertised and sold 53 of the bikes imported from United States firm PTX Performance Products that had not been fitted with front brakes in accordance with New Zealand safety standards.
But that wasn’t the only problem.
The bikes were not marked with the manufacturer, importer or supplier’s details; the owner’s manual did not provide all the required torque settings; and the manual did not include all the required warnings, such as the need for increased braking distance in wet conditions.
A recall notice was issued and
19 of the bikes were returned and five had the missing front brakes fitted.
However, the owners of 18 of the defective bicycles either did not respond or were unable to be located.
Prosecutor Alysha McClintock, representing the Commerce Commission, asked for a start point of between
$130,000 to $150,000, which would reflect the degree of carelessness by the company and the importance of the safety standard that had not been met.
A large fine was required to act as a deterrent to other importers to not ignore the need to meet the stringent standards for bicycle sales in New Zealand, which was already ‘‘an inherently dangerous activity’’ on the country’s roads.
Bikes sold without the required sets of brakes were an unacceptable escalation of that risk.
The company’s lawyer Matt Sumpter asked for a start point for the fine in the range of $25,000 to $40,000.
The bikes had only been sold over a six-week period, and sales had ceased immediately once the lack of an attached front brake had been pointed out by people who had bought the bike.
The company had acted swiftly to issue a recall notice, recruited new staff to sort out the problem and overhauled its importation procedures.
Sumpter also pointed out the bicycles had met United States safety standards.
Judge Roberts took a start point of $125,000.
After factoring in a 10 per cent discount for the company’s previous good record and a further 25 per cent reduction for the early guilty pleas, he ended up with a fine of $80,000.
‘‘The breach was at least at a moderate level,’’ he said.
‘‘Torpedo7 ought to have taken steps to ensure compliance. Consumers were placed at risk. The fact no harm was actually registered misses the point. They ... were an accident waiting to happen – the latent risk was always there.’’
During sentencing, the judge read out details of the company’s turnover and profits in the 2017 and 2016 years, but then suppressed all those details from publication.
Torpedo7 is a wholly-owned subsidiary of The Warehouse Group.
It has 16 retail stores as well as the 1-Day online trading website, which operates out of premises in Sharpe Rd in Tamahere.
‘‘Torpedo7 ought to have taken steps to ensure compliance. Consumers were placed at risk. The fact no harm was actually registered misses the point. They ... were an accident waiting to happen – the latent risk was always there.’’
Judge Allan Roberts