Legal rights during recall (electric bike)

FlyingSquirrel2

We have an electric cargo bike which we use for transporting our children to school, activities and at weekends. For anyone not familiar these bikes cost in excess of £3000 and have a high resale value (if we’d sold it last week we probably would have got 80% of what we paid for it). 

On 14th Feb the company who make the bikes (Babboe) were ordered by Dutch trading standards (AFAIU) to cease selling all bikes due to serious safety concerns. 

For context, they had a major recall on a 2 wheel model a few years back (specific frame numbers of one model) and they repaired all bikes that time… but this time they will potentially have to recall ALL ages of almost all models of cargo bike they sell. Which is MASSIVE. 

I wondered if anyone knows the legal position if there is a recall? We’ve been advised to stop using the bike until further notice which is a huge pain, and have no idea how long it will take to resolve. We bought our bike nearly new via a “hire before you buy” cycling organisation and they don’t know what’s happening yet (in fact it was me who alerted them to the issue in the first place). 

Would we be compensated if the bike is recalled?

If the company goes bankrupt as a result, what would happen then, are we just left with an unusable bike and £3k out of pocket? 

Article for reference…  https://www.bicycleretailer.com/industry-news/2024/02/16/babboe-cargo-bike-brand-stops-sales-because-dutch-investigation-broken

ArbitraryRandom

How long ago did you buy it?

You may have a claim against the retailer for a partial refund or replacement if it's less than 6 years under your consumer rights... allowing one would assume the replacement would need to be a competitors non-faulty model if all of the products are being recalled.  

I know you said you purchased on a hp scheme, but if you made the payments on credit card you may also have a S75 claim? Hopefully a knowledgable forum member would be along soon ( @born_again )

Otherwise it's a case of waiting for the manufacturer to confirm the process (if it's a full recall or if they'll pay for repairs). You'll need to get your proof of purchase ready and you'll generally get a refund (possibly a fixed amount or based on the number of years use vs the expected lifespan).

FlyingSquirrel2

We bought it in late 2020, having hired it for 3 months first. So it’s not an HP arrangement, actually we bought it through the cycle to work scheme (which is a salary sacrifice/tax efficient workplace scheme). I did wonder if that would have any bearing - but no credit card protection unfortunately. 

But yes I think we’re going to have to wait and see otherwise…

ArbitraryRandom

Late 2020 means you would have an option via the retailer if you wanted an immediate resolution. 

Issue might be that using your consumer rights would likely get you a partial refund (maybe ~60-70% if a new bike would be expected to last 10 years).

If you wait, then you'll be without a bike for however long it takes to resolve, but you might get a full refund (you might also only get a partial refund of the same amount or less than you would have gotten from the retailer, there's no way to know unless you actually try...)

If I were you, if there's a similar non-recalled product on the market this retailer offers, then I might try and push for a like for like replacement (a second hand bike of similar specs in a different brand)? 

Okell

FlyingSquirrel2 said:

We bought it in late 2020, having hired it for 3 months first. So it’s not an HP arrangement, actually we bought it through the cycle to work scheme (which is a salary sacrifice/tax efficient workplace scheme). I did wonder if that would have any bearing - but no credit card protection unfortunately. 

But yes I think we’re going to have to wait and see otherwise…

Does that mean you don't own it - your employer does?  (I'm always confused by the cycle to work scheme.  It can cause complications when things go wrong...)

You might need to examine the T&Cs of the scheme quite closely

Aylesbury_Duck

I think the cycle to work scheme element poses a problem, because the OP doesn't have consumer rights.  As I understand these schemes, the employer is the purchaser (presumably that makes it a B2B purchase) and the OP reimburses the employer through salary sacrifice.

That said, there's no harm keeping in touch with the cycling organisation OP refers to, but that might be their only route to a resolution.

Grumpy_chap

The OP references a recall notice in Holland and then that they have been advised to stop using the bike.
Who advised the OP?

What is the actual concern and does it affect the OP's bike?  There seems to be some speculation at present as the OP says "will potentially have to recall ALL ages of almost all models".  It may transpire to be less significant than that.

I would expect, in the first instance at least, that a safety recall on a bike like this would be treated in a similar way to a safety recall on a car.  AIUI, during that process with a car, the owners have no extra consumer rights to reject / refund etc.

Hoenir

 FlyingSquirrel2 said:

We’ve been advised to stop using the bike until further notice which is a huge pain, and have no idea how long it will take to resolve. 

Who by? There's nothing official so far. 

Veteransaver

Any idea what is actually wrong with it? Difficult to see how a fault on a bike isn't easily fixable (Eg brakes / wheels etc unless it's an issue with the electric motor / battery?

molerat

Veteransaver said:

Any idea what is actually wrong with it? Difficult to see how a fault on a bike isn't easily fixable (Eg brakes / wheels etc unless it's an issue with the electric motor / battery?

From the link in the OP

Babboe cargo bike brand stops sales because of Dutch investigation into broken frames

ArbitraryRandom

Re if it's B2C or B2B - I think technically the OP bought their bike from their employer (or the employer's chosen scheme) when the payments were finished (the residual market value was assessed and a taxable payment made to transfer ownership)... so that the OP is a consumer for the purposes of the CRA and CCR, it's just a question of who it was they actually purchased the bike from. 

For reference: 

If at the end of the salary sacrifice period the employee is given, as part of a separate agreement, an option to purchase the equipment and they choose to do so, then any charge made will be liable to VAT...

There should be no automatic entitlement for the employee to take ownership of the cycle and cyclists' safety equipment at the end of the loan period. If the loan agreement (technically a hire agreement under the Consumer Credit Act 1974 (CCA)) allows for ownership of the cycle and cyclists' safety equipment to pass to the employee upon the exercise of an option, the doing of any other specified act by either party to the agreement, or the happening of any other specified event, the resulting agreement is likely to be a hire purchase agreement in which case the tax exemption available for a loaned cycle may not be available... 

However, at the end of the hire period, the employer may choose to give the employee the option to purchase the equipment under a separate agreement. Typically this would be offered at substantially less than the original value of the equipment, but to prevent a taxable benefit in kind arising as a result of the transfer of ownership the employee must pay the employer the full market value of the equipment.

https://podab.co.uk/docs/cycle-to-work-guidance.pdf

Grumpy_chap said:

AIUI, during that process with a car, the owners have no extra consumer rights to reject / refund etc.

I could be mistaken, but I believe with a PCP arrangement, the scheme administrators are held jointly liable with the sellers for any breach of rights/contractual issues.

If the CRA is applicable - assuming the OP is a consumer with a yet to be identified trader - my logic would be, the OP has been advised not to use their bike/the recall names their make/model; that fulfils the CRA requirement to prove an inherent fault (given the burden of proof is balance of probability) - meaning you'd skip directly to either repair/replace or refund. 

As repair would require waiting for the manufacturer to confirm a fix (and the CRA requires the repair to be carried out in a timely manner which does not inconvenience the customer), replace would be with a comparable model or, if uneconomical/impossible, the final remedy is part refund. 

Not an ideal situation, but if the OP can't manage for an extended period without the bike, then at least a way to address the issue in the short term.