Members-only deals site Ozsale taken to court over fire hazard claims

The competition watchdog is taking a members-only online shopping website to court for allegedly selling children’s nightwear that did not comply with mandatory safety standards.

The Australian Competition and Consumer Commission alleges Ozsale sold children’s nightwear garments between July 2014 and October this year without the appropriate fire hazard warnings.

Ozsale is a members-only shopping club that sources excess inventory from suppliers.

The ACCC claims Ozsale sold five children’s nightwear garments that had insufficient fire hazard warnings or had no warning labels at all.

In addition, the watchdog alleges one garment’s design did not comply with Australian standards as the cotton material it was composed of was too dense and, because of this, it was highly flammable.

Ozsale has since recalled the products in question and is offering customers a full refund.

The competition watchdog has launched proceedings in the Federal Court and is seeking penalties, injunctions, costs and the implementation of a safety compliance program. The case is due to be heard in Sydney in February next year.           

ACCC deputy chair Delia Rickard said in a statement businesses must ensure all products sold in Australia comply with the relevant safety standards.

“Australian consumers are entitled to expect that children’s nightwear purchased in Australia is safe, fit-for-purpose and compliant with the mandatory Australian standard,” Rickard said.

“This requirement extends to all children’s nightwear, irrespective of the retailer’s business model. Businesses such as Ozsale which purchase goods not originally intended for sale in Australian markets from overseas suppliers must have adequate procedures in place to ensure that those goods comply with applicable mandatory Australian standards before they are offered for sale to Australian consumers.”

Ursula Hogben, principal and general counsel at LegalVision, told SmartCompany if the ACCC’s litigation is successful, Ozsale could face penalties of up to $1.1 million for the company or up to $220,000 for an individual. 

“Children’s nightwear that does not comply with Australian safety standards poses a genuine risk to safety and even to children’s lives,” Hogben says. 

“There would have been considerable negative consequences if any children had been burned while wearing the nightwear, plus of course, significant negative publicity for Ozsale.”

Hogben says the same safety standards apply to online retail businesses as to bricks-and-mortar stores. 

She recommends all retailers consider the safety standards for all imported products, complete a cost-benefit analysis on importing products and factor in the cost of good advice and a product safety compliance program.

“Product Safety Australia helps businesses understand the mandatory safety standards that apply to products,” she says.

“Businesses need to review the standards and have procedures in place to assess products to make sure they are compliant. This will prevent business owners from breaching the standards and will help protect them from penalties imposed by the ACCC.”

SmartCompany contacted Ozsale for comment but did not receive a response prior to publication.