According to the ACCC's recall notice, the Basis Peak smartwatch supplied by Basis Science and Intel "may overheat during wear" and "An overheating watch can result in burns or blisters on the skin surface."
The Basis Peak - which includes fitness and sleep tracking functions - was supplied to customers of MLC between 1 January 2015 and 13 June 2016.
The ACCC says the watches should be returned to Basis for a full refund.
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Various notebooks, phones and tablets have been recalled over the years due to the danger of overheating, but this appears to be the first time the ACCC has issued a recall notice for a smartwatch.
In 2014, Fitbit recalled its Force device when some users experienced contact dermatitis from either the methacrylates in the adhesives or nickel in the stainless steel casing.