US consumers have brought a class action lawsuit against Brisbane-founded COVID rapid test business Ellume, alleging the company unfairly enriched itself at their expense after failing to provide refunds for inaccurate tests.
The action comes after Ellume, which inked a $300 million deal with the US government in 2021, was forced to recall 2.2 million test kits last year over concerns about higher than acceptable false positive rates.
Ellume resolved the manufacturing issue which led to the recall in 2021. Credit:AFR
The company has resolved the issue which led to the recall, but affected consumers have now launched proceedings in the United States District Court in the District of Maryland, arguing they have not received full refunds for tests which delivered false positives.
Indiana resident Karen Kerschen claims she spent $US65 ($87) on Ellume test kits ahead of a trip to Ireland with her sister, so that she could show a negative result within 72 hours of returning back to the United States.
Court documents outline that she took an Ellume test in October 2021 in the days before her return to the US and returned a positive result. The operator of the tour she was taking advised that the whole tour group would have to isolate immediately, missing a day’s excursion and meal.
When she attempted to use her sister’s test kit to validate the result, she was advised via the app that the test had been recalled. Kerschen claims she eventually made contact with Ellume who advised her to “go out and buy another test kit”.
The tour company required that she receive a negative result, so she travelled to a testing site and paid for a different test, which showed her to be negative to the virus. It cost €40 ($58) to travel to the site and €99 ($143) for the test.
Kerschen alleges she contacted the company for a refund on return to the US but had not received one.
Another plaintiff, Wallace Lovejoy, claims he and his wife missed a trip to the United Kingdom after they both took Ellume tests. She tested positive while he did not, though subsequent PCR tests showed a negative result.
Lovejoy claims he received a cheque in the mail without a cover note from Ellume for $US215 in November, though his test kits had cost $US538 to purchase.
In their claim, the US consumers say that a failure to secure timely refunds for tests which were recalled unfairly benefitted Ellume.
“ Rather than refund the purchase price of the Ellume COVID Tests, Ellume has unjustly retained the monies that customers spent on the recalled test kits. Accordingly, Ellume unjustly enriched itself at the expense of Plaintiffs and Class members,” the plaintiffs said in the complaint filed with the court.
Ellume was founded in Brisbane and has a production facility there for its tests, though the stock it makes locally is exported to the US.
Chief executive and founder Dr Sean Parsons has long said the US market was the company’s focus, given that Australia only gave the green light to rapid antigen test use last year.
The tests are not registered for use in Australia, with the company expected to file for Therapeutic Goods Administration approval this year.
An Ellume spokesperson has previously told this masthead that the company had identified the manufacturing issue which had led to concerns about false positive results and that the issues affecting recalled tests were now resolved.
The company has been issued a summons to respond to the court action. Ellume has been contacted for comment on the case.
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