NZME Advisory Limited has been sentenced for breaches of the Fair Trading Act after it sold children’s toys containing small magnets, two of which went on to be swallowed by an 11-year-old girl who required surgery.

The company owned GrabOne, a “daily deals” site, which breached the Fair Trading Act and a dangerous goods notice by selling a magnetic puzzle toy known as a Buckyball.

The puzzles contained small high-powered magnets, which are prohibited for sale in sets of two due to the safety risk they pose.

Charges were laid by the Commerce Commission in December last year. The company pleaded guilty to the charges in March.

NZME Advisory Limited sold 213 magnetic toys between October 2020 and September 2021. After being contacted by the commission, it recalled the sets and contacted customers to notify them of the recall.

“Tragically, we are aware of one case in New Zealand where a child did swallow two of the magnets from one of the magnetic toys supplied by NZME, and significant surgery was required to remove them,” the commission’s general manager of fair trading Kirsten Mannix said.

The company appeared for sentence at the Auckland District Court yesterday, where it was fined $87,750. The company earlier made a provision of $206,000 in its full-year financial statements relating to the prosecution.

NZME Advisory Limited, a subsidiary of NZME Limited which publishes the Herald and owns multiple radio brands, sold GrabOne to Australian company Global Marketplace for $17.5 million in October 2021.

NZME CEO Michael Boggs said the company was horrified to learn of the situation, and immediately took steps to recall the product.

NZME chief executive officer Michael Boggs. Photo / NZME

“This included emailing and or phoning customers who had purchased the item, or in the case we were unable to make contact in this way – physically visiting them at their homes.”

“Last year I personally reached out to the girl’s mother to apologise, and to offer any assistance to help with her daughter’s recovery.”

The company also made a donation to Starship Children’s Hospital where the child was treated and made a support payment to the family.

Mannix said that since 2017, the commission has prosecuted 30 businesses for the sale of non-compliant products.

“It’s vital that businesses take the time to understand their obligations when advertising and supplying products for sale – particularly if they are subject to a product safety standard or an unsafe goods notice.

“If you are concerned that a product is unsafe or doesn’t comply with product safety laws, we encourage you to remove it from the household, return to the seller and inform the Commerce Commission.”

- Ethan Griffiths, Open Justice