It was a quiet Sunday at their Moreton Bay home for 15-year-old Summer Van Andel and her younger brother Quinn.

They were watching television in their living room when a "giant explosion" sent "shards" flying throughout the house. 

A flame as high as the ceiling ignited in the house. In the centre of that blaze, a beloved toy car was now almost unrecognisable.

"It had been obliterated," Summer said.

The family had recently purchased a lithium-ion battery for the car, which they say had been placed on charge only moments before the fire erupted.

"One second, everything was fine, and then the next, it was utter chaos," Summer said.

"I thought that someone put a bomb in the house and that it had blown up."

Eleven-year-old Quinn bolted out of the back door with the family dogs to call Queensland Fire and Emergency — and their mum.

Summer stayed behind to try to douse the flames before she eventually ran out the front door.

"I was feeling very shaky. I couldn't stop shivering," she said.

Her loud cries for help and the smoke alarms alerted their neighbour, a firefighter, who rushed over to take control of the situation.

"I was just so terrified that it was going to blow up again," she said.

'Miracle' the children escaped

Summer's mother Gabrielle Taylor said it was a "miracle" her children weren't injured and her house was saved on that day last December.

"It made me so sick in my stomach because I just realised that we had an extremely close call," she said.

The toy car and battery were disposed of, but four months later the burnt holes in the floor and wall remain in the house.

"Damage in total I've calculated to be nearly $8,000," Ms Taylor said.

According to authorities, more than 1,000 fires were caused by lithium-ion batteries last year across Australia.

Ms Taylor said the battery was purchased from Mr Toys Toyworld.

She wrote to them and the manufacturer to ask for compensation.

Both are refusing to pay. 

Mr Toys Toysworld — a Queensland retailer — sold Ms Taylor the battery alongside a tailored charging device that turns off when the battery is fully charged.

In an email seen by the ABC, the retailer referred her to the manufacturer multiple times.

Ms Taylor said the New South Wales company Model Engines told her in an email it was not responsible for the damage, claiming it was her fault the battery exploded because she didn't follow the user guide.

It left the single mother feeling frustrated.

"It was on the third charge that it exploded," she said.

"There was no warning, it was just charging normally."

Customer guarantees

Lithium batteries can explode in circumstances including when they are overheated or overcharged but, in cases where they are faulty, both the manufacturer and retailer are responsible.

The Australian Competition and Consumer Commission (ACCC) deputy chair Catriona Lowe said customers were often referred to the manufacturer – even though this was "not right".

She said under consumer guarantee rights, if a product is faulty, buyers are entitled to either a repair, replacement, or refund.

"The retailer who sold you the product does need to deal with you," she said.

Ms Lowe said retailers — after dealing with the customer — could, in turn, go to the manufacturer if there was a manufacturing fault.

"We do understand that it can be difficult for consumers to assert these rights," she said.

Professor Luke Nottage said if consumers are getting the "run-around" they can take the matter before a court, either as a small value claim or in a tribunal, depending on laws in each state and territory.

"It's a hassle for the consumer. They have to pay a non-refundable fee even if they win," Dr Nottage said.

He said even though he knows Australian consumer law "pretty much back to front" he probably wouldn't pursue a small value claim, unless it was a case study for a class action. 

The consumer watchdog is calling for a reform in consumer laws that would create more incentives to make retailers and manufacturers follow the rules.

"The ACCC can act where traders mislead consumers about their consumer guarantee rights," Ms Lowe said.

"But we actually want it to be a breach of the law not to honour those consumer guarantee rights."

A spokesperson for federal assistant treasurer Stephen Jones said the government had made progress on several consumer-focused reforms, including consulting on prohibiting unfair trading practices.

The spokesperson said the government would continue to support consumers by delivering appropriate regulation and protections.

'Please fix the damage'

Ms Taylor said she was considering taking the matter to the Queensland Civil and Administrative Tribunal.

"I'm shocked that it's been as hard," she said.

"Please fix the damage, and please say you'll recall the product."

Ms Taylor said she was more cautious charging any lithium-ion batteries now, but wanted retailers and manufacturers to take more responsibility to sell safe products.

"As a consumer, I want to be able to use a product that's designed for use inside and not [be] worried that it'll burn my house down," she said.

The ABC has contacted Mr Toys Toysworld and Model Engines for comment.