Consumer Protection eBrief – 21/02/2013

21 February 2013|In Consumer Protection Act Briefs

In this issue:

  • Australia: Australian Federal Court bans pyramid scheme operator
  • United States: Over 500 000 BMWs are recalled due to cable problem

Australia: Australian Federal Court bans pyramid scheme operator

An Australian court has found that Crimeguard International Security Systems Pty Ltd’s former director, Mr Leslie Stott, engaged in false, misleading and/or deceptive conduct concerning representations about the profitability of the Crimeguard business.

Following this finding, the court banned Leslie Scott for 5 years from managing a business and permanently banning him from engaging in any business activities that make unfounded representations of the potential earnings of a business.

The Australian Competition and Consumer Commission described pyramid selling schemes as “…an arrangement in which persons make a payment to join the scheme, having been substantially induced to join, on the basis that they can subsequently earn payments for inducing others to join the scheme.” The Commission also stated that pyramid schemes are intended to only benefit the original sellers of the scheme by taking advantage of later recruits.

United States: Over 500 000 BMWs are recalled due to cable problems

Following an investigation by the Canadian automotive safety agency, Transport Canada, BMW has identified certain BMW models that may contain a fault which could cause loss of electrical power to the engine resulting in it stalling. BMW have subsequently recalled half a million of its vehicles in the United States, including the 1 Series, 3 Series and Z4 models.

BMW explains that the fault is caused by wear and tear on the cable to the battery, which is located in the trunk which could cause the engine to suddenly shut down.

BMW described the recall as voluntary, but also stated the National Highway Traffic Safety Administration must be informed within 5 days of the driver becoming aware of the fault or face certain fines. BMW stated that it was aware of one accident that may have been related to this fault in Canada and conducted multiple tests on the parts until they were able to duplicate the problem which led to the recall.

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