Product Safety Australia – Recalls 17 January 2018

This week’s product recalls includes the following:

Jetpilot Australia Pty Ltd — The Cause Kids Neo Vest Personal Flotation Device (PFD)

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Honda Motor Co. Ltd — GL1800 Goldwing Motor Cycle

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Le Rose Nominees Pty Ltd — Fruit Mince Tarts

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Tassal Operations Pty Ltd — Tasmanian Smokehouse Australia Sliced Smoked Salmon

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Murray River Organics Pty Ltd — Coconut milk powder non-organic / non-GMO

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ABC Sales & Marketing Pty Ltd — Mamee Monster Rice Sticks vegetable flavour 6 pack

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Golden North Pty Ltd — Frozen icecream – various flavours and sizes of brands Golden North, Black & Gold, Country Style, Foodland and Simple

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BMW AG — C Series – C 650 Sport/ C 650 GT, F Series – F 700 GS/F 800 GS / F800 GS Adventure, R nine T Scrambler

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FCA Australia Pty Ltd — 2010 (DJ) Dodge RAM 2500 Pickup and 2010 (D2) Dodge RAM 3500 Pickup

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FCA Australia Pty Ltd — Vehicle Recovery Strap supplied with 2014 – 2018 (KL) Jeep Cherokee Trailhawk

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Linley Valley Pork — Thai Coconut and Lemongrass Pork Loin Roast

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Marine Power International Pty Ltd — Mercury Diesel 3.0L 225HP and 265HP Sterndrive marine engines

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For more please visit https://www.productsafety.gov.au/recall/

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When is it time to stop pretending to care about customers and actually start?

I reported on two claims recently which were completely and utterly off the rails. The first being a home where this would be the 4th Christmas the Insured would be out of their home despite having their insurers top of the range product. It was a bush fire situation and there was no suspicion of arson, it was just a case of the panel beater builders completely letting the Insured down. After 15 months of trying, we finally got a common-sense solution, but it has now been 6 weeks that the release has been stuck in legal. How to draft a release was one of the first things I learnt as a claims officer when I was 17 years old and I cannot understand how a claim that has been so terrible handled is dragged on so that it cannot be resolved before Christmas number 4.

I was equally dismayed this morning to see a comment in The Age (21st December 2017) where an Insured has said

“The insurance companies are hopeless I won’t use them, I’ll just try and sell these”

This is a response to the recent hail storm we had in Melbourne.

It is comments like these and the negative feedback from the Insured in the claims that I wrote about recently, which they are saying to their friends and relatives, which caused the great doubt of trust in our industry. An industry which has as its core principles, Utmost Good Faith.

If we don’t address this situation we will suffer as an industry in the long term.

Source: The Age Newspaper, Melbourne, 21 December 2017

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Product Recalls Australia – 14th December 2017

This week’s product recalls includes the following:

IPD Group Limited — Salzer DC Enclosed Isolators

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Daimler Truck & Bus Australia Pacific Pty Ltd — Mercedes-Benz Atego 970 Truck

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Warburn Estate — Bottled Wine

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FCA Australia Pty Ltd — 2012-2013 (KK) Jeep Cherokee

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Toyota Motor Corporation Australia — Corolla ZZE122 & Avensis Verso ACM20

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Toyota Motor Corporation Australia Limited — Toyota Echo NCP1 & RAV4 ACA2

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Nissan Motor Co (Australia) Pty Ltd — N16 Pulsar, Y61 Patrol, D22 Navara, A33 Maxima & T30 X-Trail

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Nissan Motor Co (Australia) Pty Ltd — N16 Pulsar, D22 Navara, Y61 Patrol, X-Trail

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BMW Australia Ltd — BMW 3 Series – E46

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Kia Motors Australia — 2017 YP Carnival

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GlobalOutlet.com — Car Towing Strap

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VTech Electronics (Australia) Pty Ltd — VTech Baby Pack & Go Travel Mobile

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VTech Electronics (Australia) Pty Ltd — VTech Baby Shake and Sing Elephant Rattle

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Mercedes-Benz Australia/Pacific Pty Ltd — Mercedes-Benz Passenger Cars “C” Class 63s

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Gapfiller Pty Ltd — Discoveroo Magnetic Stacking Owl

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Aldi Stores — ‘Berg Smallgoods’ American Style Skinless Hot Dogs 375g

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SCAM WARNING

I recently received an email warning about a new credit card scam. Read below so you don’t get stung.

 

The following is a recounting of the incident from the victim:

Wednesday a week ago, I had a phone call from someone saying that he was from some outfit called: “Express Couriers,”(The name could be any courier company) He asked if I was going to be home because there was a package for me that required a signature .

The caller said that the delivery would arrive at my home in roughly an hour. Sure enough, about an hour later, a uniformed delivery man turned up with a beautiful basket of flowers and a bottle of wine. I was very surprised since there was no special occasion or holiday, and I certainly didn’t expect anything like it. Intrigued, I inquired as to who the sender was.

The courier replied, “I don’t know, I’m only delivering the package.”

Apparently, a card was being sent separately… (the card has never arrived!) There was also a consignment note with the gift.

He then went on to explain that because the gift contained alcohol, there was a $3.50 “delivery/ verification charge,” providing proof that he had actually delivered the package to an adult (of legal drinking age), and not just left it on the doorstep where it could be stolen or taken by anyone, especially a minor.

This sounded logical and I offered to pay him cash. He then said that the delivery company required payment to be by credit or debit card only, so that everything is properly accounted for, and this would help in keeping a legal record of the transaction.

He added couriers don’t carry cash to avoid loss or likely targets for robbery.

My husband, who by this time was standing beside me, pulled out his credit card, and ‘John,’ the “delivery man,” asked him to swipe the card on a small mobile card machine with a small screen and keypad. Frank, my husband, was asked to enter his PIN number and a receipt was printed out. He was given a copy of the transaction.

The guy said everything was in order, and wished us good day.

To our horrible surprise, between Thursday and the following Monday,  $4,000 had been charged/withdrawn from our credit/debit
account at various ATM machines.

Apparently the “mobile credit card machine,” which the deliveryman carried now had all the info necessary to create a “dummy”  card with all our card details including the PIN number.

Upon finding out about the illegal transactions on our card, we immediately notified the bank which issued us a new card, and our credit/debit  account was closed.

We also personally went to the Police, where it was confirmed that it is definitely a scam because several households had been similarly hit.

WARNING: Be wary of accepting any “surprise gift or package,” which you neither expected nor personally ordered, especially if it involves any  kind of payment as a condition of receiving the gift or package. Also, never accept anything if you do not personally know or there is no proper identification of who the sender is.

Above all, the only time you should give out any personal credit/debit card information is when you yourself initiated the purchase or transaction!

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Product Recalls Australia – 5 December 2017

This week’s product recalls includes the following:

Nissan Motor Co (Australia) Pty Ltd — Nissan D23 Navara & R52 Pathfinder Series 1 Models

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Husqvarna Australia Pty Limited — Selected 2015-2017 TS 242 and TS 246 Lawn Tractors

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Toys “R” Us — Totally Me Clay Studio

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Nissan Motor Co (Australia) Pty Ltd — Infiniti V37 Q50/Q60

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LEADER Systems Pty Ltd — AFI-HD-AU Router and mesh point kit

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Apotex Pty Ltd — Apo-Perindopril Arginine 2.5 mg, 5 mg and 10 mg tablets (bottle) – extended recall (new batches)

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Telwater Pty Ltd — Quintrex, Stacer & Savage Boats

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Eco-Farms Pty Ltd — Ground cinnamon

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Yale Prima Pty Ltd — Moretti 11 Fin Oil Column Heater

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Riebeck Pty Ltd t/as Little Zebra Chocolates — Chai Supreme Dark Chocolate

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Audi Australia Pty Ltd — MY2018 Audi Q2 (GA) & A3 (8V)

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For more recalls please visit: https://www.productsafety.gov.au/recalls

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Product Recalls Australia – 28 November 2017

This week’s product recalls includes the following:

catchoftheday.com.au Pty Ltd — Benefit Gimme Brow Volumiser Gel

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Toyota Motor Corporation Australia Limited — C-HR NGX10 & NGX50

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Toyota Motor Corporation Australia Limited — Tarago ACR50 & GSR50

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AGL Energy Services Pty Limited — Salzer DC LB232 (a.k.a. IPV40E & IPV40ES) isolator switches

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For more recalls please visit: https://www.productsafety.gov.au/recalls

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Australia’s failing infrastructure

Recently, I wrote about issues with electricity infrastructure not keeping up with development. The same issue is occurring with storm water drains.

Water damage arising from storms is one of the greatest causes of property insurance losses in Australia, so it should be of great concern to see that our councils and water authorities do not seem to be investing in the infrastructure to protect our homes and businesses.

There are three main issues. The first is councils should simply not allow developments in known flood zones.

The second is that they need to invest in upgrading the storm water systems if they are going to reap the reward of extra rates from new developments. In Camberwell, where our Melbourne office is located,  one development alone has two underground storm water pipes that are around 450mm in diameter, but the council drainage system that it will flow into is less than ¼ of that capacity.

Due to all the additional hard surfaces that are a direct result of turning homes on ¼ acre blocks with a yard into multistorey apartments that take up much of the block and what is left is concreted, means water that was previously soaking into the ground is now surface water, and the existing council drainage system simply cannot cope.

Add to this the fact that developers are not required to bund their construction sites to stop excavated soil and building materials such as sand, gravel etc from being washed into the drains. If they are required to do this, our local authority is not policing it. As well as the odd dodgy builder who just washes down concrete slurry in the roads and lanes, and of course, you get localised flooding.

It appears that the council has also reduced the clearing of the drains despite all the new development and this only compounds the problem. Even if it is the same frequency, it is not sufficient to deal with the extra debris the new developments have created.

As a result, several of our neighbours have had water inundation 5 times this year, when this did not occur in the past.

The trouble for business of course is that unlike residents we have no vote or say in local elections despite most of us spending more time in the electorate than at home and paying significantly more rates than an individual home owner.

Clearly the insurance industry needs to help the insuring public and start a discussion with local authorities in an effort to address this serious problem which is clearly only getting worse.

Alley way next to LMI Melbourne, where during a recent storm the water reached approximately 3 inches deep due to not draining properly.

Building site near our office demonstrating no bunding and the ability for the soil, sand and other materials to wash into the drainage system and block it.

 

 

Image demonstrating a large piece of concrete debris washed down from a building site blocking almost the entire drain which resulted in the alley flood.

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Learning from the past to protect against today’s hazards

During the very hot summer of 2008-2009, that included the Black Saturday bush fires, our Melbourne office was left without power due to both the fires and the inadequacy of an electrical sub-station across the road.

As it is imperative for us to provide our claims services during periods of natural catastrophe, so we are able to assist people in need we installed a backup generator in our building. Some within the business questioned the cost of installation and the ongoing maintenance, but I felt that as part of our risk management and business continuity management plan installing the generator was the way to go.

We have had reason to call on it only about 4 times until this year. Due to power outages, often associated with storms, it has meant that recently we have been able to maintain phone, email and web services at a time of high demand.

This week the generator has come into its own. With the apparent uncontrolled or at best inadequately proliferation of high rise developments in the area, now that Melbourne has had its first taste of summer, the infamous sub-station across the road caught fire and will not be replaced for at least a week from the time of failure. Whether the privatised carrier simply puts back the same size unit or upgrades it to cover the increased demand no one can advise us.

The apparent reason for the failure was that at after 5pm there was an electrical demand surge when everyone came home and turned on their air conditioners and the system could not cope.

In any event the ongoing outages of power to the area have not effected LMI due to our addressing the issue when it first arose nearly 9 years ago. The generator kicks in every time there is a black out or equally damaging brown out.

Of course, we are not the only business in Melbourne feeling the effect of the infrastructure not keeping pace with development. I heard on the radio this morning that homes and businesses in Blackburn and/or Box Hill have power outages. South Australia had their own issues recently.

Bearing in mind, this is only the start of summer, this issue is clearly not going to be an isolated case and all businesses are encouraged to revisit the business continuity plan and if they do not have one, consider creating one.

The issue of inadequate infrastructure is not just limited to electricity. Storm water and telecommunications are also proving inadequate and I will share examples of this issue in upcoming posts.

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Product Recalls Australia – 21 November 2017

This week’s product recalls includes the following:

For more information or to view all recalls, please visit: https://www.productsafety.gov.au/recalls

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Cheapest is not always best – Lessons for procurement officers

I spend much of my time speaking at conferences for various industries, where I encourage the business owners not to purchase their business insurance on price, but to carefully consider how important their insurance program is and the protection that it offers.

Increasingly, over the last few years. I have been questioning the true value of a procurement officer, for regardless of what the tenders say, it seems to come solely down to price, without considering the true value that a good service provider to the insurer provides, nor the cost of what getting it wrong does to the average claims cost and potentially to the brand of the insurer and insurance in general.

I will give two examples to demonstrate what seems to be happening more and more.

The first involves a couple in their 70’s who have had their home destroyed during a bushfire over 4 years ago. Clearly, the builder that won the rebuild never expected to win the job and thought the matter would be cash settled. They were then horrified to find that they in fact had won the tender to rebuild. After 2 years, work had not started on the property and the Insured, naturally, complained. The builders found themselves busy at that time and engaged another building firm to do the work and it went along swimmingly until the first progress payment went in from the second builder to the first and they realised that they were going to lose more money in having someone else do the work than they themselves completing it. The first builder, original tender winner, dismissed the second builder and took the project on. Sadly, they did not start doing any work since the dismissal of the first builder, by which time I was then asked to get involved rather than the client go to the media.

I carried out an inspection of the property and then attempted to meet with the claims officer concerned to express some very valid concerns of the Insured and items that I had seen during my site visit. My first email was ignored, so I sent a follow up one setting out just some of the issues, three of which were:

  1. Between the second and first builder, the floor had been propped up in the centre of the home with nothing more than a piece of 19mm x 35mm pine framing. This may have been acceptable while the home was being built to floor level, but once the upper level was on it, the floor had bowed by at least 10mm and I was concerned that when the home was jacked up to be made level again, any works inside including plaster finishes, tiling etc may crack.
  2. The builder had held discussions with the Insured and it was agreed that the home would be rendered at the Insured’s expense. No credit however had been given for the fact that the builder would therefore be able to use seconds bricks rather than first quality as originally quoted/agreed.
  3. Because the home had been left without a roof covering for so long, there was mould clearly visible on the floor, framework and particularly between the floor plate and the floor.

I got a very disappointing reply back suggesting that to the untrained eye the timber prop may appear dangerous, but it wasn’t, and secondly that the bricks were not seconds but mixed, and thirdly they completely ignored the mould.

Ultimately, an engineer confirmed that not only was the timber ‘support’ dangerous as I predicted, but was so weak that it may have caused the entire home to collapse. The claim officer had also misunderstood the difference between seconds bricks, being that they were not first, and second hand bricks which means they came from another site. The day after they received my letter, the builder was advised and immediately sheared up all the framework, hiding the mould that I had pointed out, without treating it first. Because of the hype around mould at the time, coupled with the age of the Insured’s (I would remind you they are in their 70’s and the wife quite frail), I thought I would have it tested. I then received a note advising I had vandalised the home.

I took the entire issue to the national head of claims for that particular insurer and while someone with more experienced was appointed, it still took a full 15 months to get resolved with the insurer agreeing to cash settle the claim. The cost of the claim had blown out by several hundred thousand dollars, combined with the fact that they will be paying rent until they can get a new home built themselves.

Insurance should be there to help people in their time of need.

This was a completely innocent fire from the Insured’s perspective (it was clear it was from the bushfire) and they will have been without a home for coming up to their 4th Christmas. This is unacceptable in anyone’s language.

The second example, involves an insured who had water damage in their home. Rather than engaging a loss adjuster to oversee the claim, the insurer decided to save money and send out a restoration company. It took 8 days for the company to even attend site, and rather than take a detailed inventory, they simply packed everything up, put it into a shipping container and assured the Insured that it would be unpacked at their warehouse, separated between wet and dry and that the wet items would be cleaned carefully and sterilized.

6 months later, it was found that the items were still in the shipping container and a vast majority of the contents, even those that were not originally damaged by water, had become affected by moisture and mould etc. Some antique furniture which had been beautifully French polished had been stripped back and sprayed with a cheap lacquer. Here, the insurer is trying to distance themselves from their agents, which of course, is unconscionable. Here again, a claim has blown out dramatically due to poor service delivery.

These are just two claims that have come across my desk, and for every one that does, I question how many others are out there. In both of these cases, how many people have these insureds discussed and expressed their disappointment with the insurance industry and the particular brands involved. The first one I had to get LMI Legal involved to resolve, and it appears from the approach on the latest water damage case, I will have to do the same, for at this stage there still appears to be absolutely no empathy for the Insureds position whatsoever.

While I am annoyed with the claim process, I think it all starts at the procurement stage. Buying services is not like buying washing machines. If you have a highly competent professional who has studied, has years of experience, then of course their hourly rate is going to be slightly higher if they are honest and only charge the hours they work. The existing procurement process, appears to favour the shortcut takers, or those who cheat the hours. Either way, the insurer misses out on engaging the right person for the job.

What disappoints me, and I feel should be called out more is that despite this being a huge dispute, the Insured has not been given any advice of the internal complaints procedure, their rights with the Financial Ombudsmen Service (FOS) etc. This confirms one of the many examples I have that some insurers are able to obtain a better rating with FOS.

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