Thermomix in Australia has been handed a $4.6 million fine in Federal Court, after an ACCC investigation found the Australian-based sales team for the $2000-plus kitchen unit violated consumer law by failing to report dangerous defects.
The ACCC case followed an investigation by CHOICE that revealed the Thermomix TM31 model had a faulty sealing ring on its mixing bowl that had led to widespread scalding incidents (the model has since been replaced by the TM5).
Between 29 March and 9 May 2016, 87 Thermomix owners filled out a CHOICE mass incident form and reported a problem with their machine (83 with the TM31 model and four with the TM5).
Forty-five reported being injured, and 18 of the injured said they received medical treatment.
CHOICE passed the mass incident report on to the ACCC at the time.
Between June 2012 and July 2016, Thermomix failed to give notice to government of serious injury caused by the machine within two days on 14 occasions.
Thermomix also released misleading and deceptive statements that the product was safe, the court found, even though Thermomix was aware of 35 serious injuries caused by the machine.
Consumers who contacted CHOICE in 2016 said Thermomix in Australia used deny and delay tactics to avoid giving refunds and in some cases demanded that customers return the machine or take the company to court.
There was also suspicion among customers and within the company that Thermomix in Australia intentionally offloaded faulty TM31 units while the new TM5 was available, a tactic that earned the company a CHOICE Shonky award.
On condition of anonymity, one former member of the sales team described a mean-spirited, sales-driven culture in which "there was bullying and intimidation from top to bottom".
Want a refund? Sign a gag order
In our earlier investigation, CHOICE obtained non-disclosure agreements from customers seeking refunds that required them "not to disparage or otherwise comment negatively about Thermomix or Vorwerk [the German manufacturer] and not to take any action which it is intended, or would reasonably be expected, to harm the reputation of Thermomix or Vorwerk, or lead to unwanted or unfavourable publicity".
One Australian law firm wrote to customers saying, "the terms of the deed of settlement [refund of the cost of the machine] are strictly confidential and must not be disclosed to any person (but including via social media) without prior written consent".
The court found that requiring a customer to sign a non-disclosure agreement as a condition for receiving a refund was a further violation of consumer law.
"Thermomix's penalties should serve as a reminder to all businesses that consumers have rights in relation to faulty products which businesses cannot restrict, alter, or remove," said ACCC Commissioner Sarah Court.
"When a consumer is entitled to a refund or replacement under the ACL, businesses cannot place conditions on that right to a refund or replacement and customers certainly shouldn't have to sign non-disclosure agreements."
Thermomix says we're sorry
Founder and Managing Director of Thermomix in Australia, Grace Mazur, says the company has learnt its lesson and will be contacting and offering a new TM5 model to the 9443 customers who bought a TM31 appliance between 7 July and 23 September 2014, the time period in which Thermomix owners were not warned about a serious safety risk but should have been.
"It is clear we should have done better in how we managed complex issues over the past few years. We regret this very much, are sorry, and apologise to those who were affected. We have learnt a lot, have evolved as a company in the years since then, and would never make these mistakes again," says Mazur.
History of CHOICE Thermomix investigation:
Stock images: Getty, unless otherwise stated.