If you sell, hire or lease vehicles or vehicle parts, you have responsibilities and obligations under the compulsory Takata airbag recall notice.
Selling affected vehicles
What are my responsibilities in relation to vehicles subject to future recall?
Unlike vehicles under active recall, you may sell a vehicle scheduled for future recall without replacing the ATAI. However, the Recall Notice requires that you must clearly communicate the serious safety risk and the need for future replacement to a buyer prior to the sale of any vehicle with an ATAI. Also note that this requirement applies to written-off vehicles subject to future recall.
For further details, please see Guidance for independent second-hand dealers and Guidance for auction houses.
What should someone do who has supplied a vehicle with an ATAI outside of Australia?
A person who has supplied a vehicle with an ATAI to someone overseas, must, as soon as possible after the supply of the goods, give the person outside Australia a written notice that:
- states that the vehicle is subject to recall
- sets out the nature of the defect and
- sets out the circumstances of using the vehicle while it has an ATAI installed.
After giving this notice to the person outside Australia, a supplier must also give a copy of that notice to the Assistant Minister to the Treasurer within 10 business days. This requirement can be fulfilled by submitting a notification to the ACCC via email to recalls@recalls.gov.au.
Can I sell a new or demonstration vehicle with a defective Takata airbag installed?
No. Suppliers must not sell or supply any new or demonstration vehicle with a defective Takata airbag to any person in any circumstances after 31 December 2018 or at any time if the vehicle is under active recall. Previous requirements, outlined in section 7(8) of the Recall Notice, are no longer applicable.
If a supplier has a new or demonstration vehicle fitted with an affected Takata airbag inflator in their possession beyond 31 December 2018, a replacement of the defective Takata airbag will need to be completed prior to being sold.
Hiring or leasing
Can I hire or lease a vehicle with defective Takata airbags under active recall to a consumer?
No, a business must not supply a new or second-hand vehicle fitted with a defective Takata airbag inflator under active recall to a consumer under any circumstances. Businesses that supply such a vehicle may face penalties for non-compliance with the compulsory recall. Only after the defective Takata airbag inflator has been replaced in the vehicle can the vehicle be hired (including hire-purchase), leased or sold to a consumer.
Can I hire or lease an affected vehicle with defective Takata airbags under future recall to a consumer?
Yes, under certain conditions. Before supplying the vehicle, businesses must notify the consumer, verbally and in writing, of certain matters. How old the vehicle is and whether it is a short or long term hire/lease arrangement will determine whether the consumer needs to be notified, and if so, what businesses must inform the consumer about the recall and possible safety risk prior to supply.
Short term arrangement (no more than 90 days)
There is no notification requirement to the consumer for vehicles that are under 6 years old at the time of supply and that remain under 6 years old for the duration of the arrangement.
For vehicles under 6 years old at the time of supply but will turn 6 years old during the arrangement, the consumer must be notified verbally and in writing that the vehicle has a defective Takata airbag inflator and is under future recall, and be advised of the possible safety risks associated with the airbag prior to supply (as set out in section 9(4)(d)(1) of the Recall Notice).
For vehicles over 6 years old at the time of supply, the consumer must be notified verbally and in writing that the vehicle has a defective Takata airbag inflator and is under future recall, and be advised of the possible safety risks associated with the airbag prior to supply (as set out in section 9(4)(d)(1) of the Recall Notice).
Long term arrangement (more than 90 days)
If the proposed hire, lease or hire purchase is for a period of more than 90 days, then, regardless of the vehicle’s age, the consumer must be notified verbally and in writing that the vehicle has a defective Takata airbag inflator and is under future recall, advise of the safety risks associated with the airbag and ask for the consumer’s consent to provide their contact details to the vehicle manufacturer so that the vehicle manufacturer can send any recall communications to the consumer if the vehicle comes under active recall.
See also: Guidance for independent second-hand vehicle dealers
Written-off vehicles
What do I need to do if considering whether to supply a written-off vehicle with an ATAI under active recall?
Supplying vehicles containing ATAIs under active recall is prohibited under the Recall Notice. A vehicle under active recall cannot be supplied (by anyone in trade or commerce) until its ATAI is replaced.
The ACCC published the Takata Recall - compliance and enforcement approach regarding written-off vehicles to outline the ACCC’s position concerning compliance and enforcement under the compulsory Takata airbag recall with respect to the supply of written-off vehicles under active recall. This guidance applies in extremely limited circumstances and does not displace the Recall Notice.
Although the ACCC will exercise its discretion about the matters we investigate or how we resolve concerns, businesses that supply vehicles in contravention of the prohibition on the supply of vehicles under the Recall Notice and the Australian Consumer Law (ACL) may nevertheless be subject to action by other ACL regulators or private individuals.
Note: under the guidance, where an ATAI is not verified as deployed but has otherwise been removed (i.e., not present in the vehicle), it is not an affected vehicle under the Recall Notice and the seller can supply it. However, because all vehicles that had an ATAI must still be accounted for, the supplier should make a record of the vehicle prior to supply. The supplier should advise the ACCC and the manufacturer of the vehicle’s VIN, describe the circumstance (for example, the vehicle has no driver [or passenger] airbag present and this was observed by X on X date) and the details of the state of the vehicle.
Do I need to provide an undertaking for vehicles that are subject to future recall or which have had their ATAI replaced?
The ACCC’s compliance and enforcement approach regarding written-off vehicles applies to limited circumstances relating to written-off vehicles under active recall. Vehicles that are under future recall at the time of supply must comply with the notification requirements as set out in the Recall Notice (refer to the above FAQs on future and active recalls for further information). For further details see the publications:
- Guidance for auction houses and
- Guidance for independent second-hand dealers.
- Takata Recall - compliance and enforcement approach regarding written-off vehicles
Does the guidance limit the buyers who can purchase written-off vehicles?
The guidance provides that the supplier of a written-off vehicle may supply the vehicle to a licensed auto wrecker or auto recycler (provided the other steps in the guidance are adhered to). The auto wrecker or auto recycler must be licensed to operate in accordance with the applicable regulations in the relevant state or territory.
Failure to meet the steps in the guidance will be taken into account by the ACCC in determining its approach to compliance and enforcement. Accordingly, suppliers of written-off vehicles must ensure they have measures in place to ensure they supply written-off vehicles to licensed auto wreckers and auto recyclers.
Does the guidance require auction houses to limit sales to pre-registered buyers?
The ACCC is aware that some auction houses have decided to limit auctions of written-off vehicles to pre-registered buyers. The guidance does not require this. However, it is open to auction houses to do so if they consider that this will assist sellers and buyers to meet their obligations under the guidance and the Recall Notice.
What if I want the supplier to replace the ATAI?
The guidance does not displace the Recall Notice, but applies to very limited circumstances where a person in trade or commerce supplies a written-off vehicle under active recall. Alternatively that person may choose not to supply the vehicle in accordance with the guidance and instead have the ATAI replaced by the supplier under the Recall Notice prior to supplying the vehicle.
What if the written-off vehicle is too damaged to drive to the nearest dealership? Who bears the cost of transportation in this situation?
The Recall Notice requires that suppliers bear the cost of replacement of an ATAI, including any necessary transportation costs. What transportation costs are necessary to facilitate replacement will depend on the particular circumstances.
In the context of a written-off vehicle that is unregistered or un-roadworthy, it is not possible for the owner (or the owner’s representative, which is often an auction house) to drive the vehicle to a dealership or other location for replacement of the ATAI (assuming the guidance is not being relied upon and the ATAI is being replaced).
The owner or auction house should contact the relevant supplier to arrange for the replacement of the ATAI at the supplier’s cost. This might involve towing the vehicle to the supplier (or representative) for replacement of the ATAI, or it might involve the supplier arranging to have a qualified technician attend the premises where the vehicle is stored pending sale to replace the ATAI.
If it is necessary for the vehicle to be transported to a dealership or other location for replacement of the ATAI, the towing costs must be borne by the supplier. Where the supplier makes appropriate arrangements (at its own cost) to have the ATAI replaced in an affected vehicle at the place where it is being stored pending sale, it becomes unnecessary to transport the vehicle.
In circumstances where there are several vehicles with ATAIs owned by an auction house or being sold by an auction house for vehicle owners, and those vehicles are stored in the same place, it would seem reasonable for a supplier to send out a technician rather than tow the vehicles given likely financial savings. Several suppliers may foreseeably be able to share the cost of sending a technician to the one site to conduct replacements on their behalf.
If I purchase a vehicle that has had its ATAI removed but not replaced, do I have a right under the Recall Notice to have the airbag replaced?
The Recall Notice requires suppliers to replace an ATAI in a vehicle if they first supply a vehicle in Australia. If a vehicle does not have an ATAI (for example, it may have been replaced or removed by an independent repairer following a collision), the supplier is not under an obligation to fit a replacement inflator. If a person seeks to repair and re-register a repairable write-off, they must address the repair and road worthiness of the vehicle, including fitting new airbags, at their own cost.
Can technically qualified people remove ATAIs on a supplier’s behalf?
The Recall Notice permits suppliers to arrange for an authorised representative to undertake the removal of the ATAI on its behalf (see section on authorised representatives for further information). Any supplier doing so, however, should ensure that the authorised representative:
- has the relevant technical qualifications and
- complies with the Recall Notice when acting on a supplier’s behalf.
Can I retrieve parts (excluding ATAIs) from alpha vehicles that are so damaged it is not physically possible to remove the ATAI?
The guidance indicates that alpha ATAIs must be destroyed in the process of entire vehicle destruction in circumstances where the damaged state of the vehicle is such that it is not physically possible to retrieve the ATAI. The guidance contemplates that the vehicle would be so damaged in these circumstances that it would be unlikely for other parts in the vehicle (including parts close to the ATAI) to be retrieved (where it is possible to retrieve the ATAI, it must be removed from the vehicle by the supplier before supply). However, this does not prevent parts of the vehicle other than the ATAI from being salvaged if it is physically possible to do so.
Spare parts obligations
What am I required to do with an ATAI that has been removed from a vehicle?
The Recall Notice provides that a person who supplies airbags or airbag inflators and is or becomes aware that they have an ATAI or a part that contains an ATAI (defined in the Recall Notice as spare parts) must as soon as practicable notify the relevant supplier of the spare part. The supplier can then make arrangements for the spare part to be safely retrieved. See Guidance for suppliers of spare parts.
Are there any obligations for identifying spare parts?
A supplier of spare parts must use their best endeavours to identify whether any parts they have in their possession, power or control are spare parts. Best endeavours in this context includes reading information provided by a supplier as part of the supplier’s second-hand vehicle action plan, periodically checking vehicle recall details available on supplier websites and checking the Product Safety Australia website.
What does as soon as practicable mean in practice?
As soon as practicable has a degree of flexibility and its meaning will depend on the circumstances.
The ACCC is aware of third parties which offer to locate ATAIs in scrap yards and auto wrecking yards for a fee, as well as making payments to incentivise retrieval of ATAIs (see section on authorised representatives). Some yards may notify a third party engaged by the relevant supplier of the location of these spare parts rather than notifying the relevant supplier directly. The Recall Notice places an obligation on a person in possession of a spare part to notify the supplier or the supplier’s authorised representative.
Regardless of payments made by third-parties on behalf of suppliers, all suppliers of spare parts have legal obligations to search their inventory for spare parts and to notify suppliers. If you are a supplier of spare parts, you must ensure that you comply with these obligations or you may face financial and other penalties for contravening the ACL.
If you are aware of any auto recycler/wrecker or authorised representative that has identified spare parts, but has not notified the supplier of the location of the spare parts as required under the Recall Notice, you should report this matter to the ACCC. The ACCC also reminds authorised representatives that persons can breach the ACL by being knowingly concerned in, or party to, a contravention of the ACL by another person.
How do I notify suppliers of spare parts?
The Recall Notice provides that the notification of the supplier may occur through the supplier’s dealer network or head office. The notification must specify the name of the person holding the spare part and the relevant details of the spare part, including quantity, type and any other relevant information.
What should I do if the origin of the spare part is not known?
Where the origin of the spare part is not known, it is intended that the person with the spare part in their possession make an assessment about what kind of vehicle the spare part could be installed into and notify that supplier accordingly.