The director of a mobile phone business which sold a faulty USB charger blamed for the death of a 28-year-old woman could face penalties of up to $605,000, a court has heard.

Huadi Bi, director of Hau Yang Australia International Trading and Investment Pty Ltd, did not appear in the Supreme Court on Friday, where the NSW Commissioner for Fair Trading launched legal proceedings against Ms Bi and her Campsie store where the faulty charger was sold.

Both Ms Bi and her company are being prosecuted for first offences under section 15 of the Electricity Consumer Safety Act.

Filipino national Sheryl Anne Aldegeur was found dead, with burns on her ears and chest, while wearing headphones inside an East Gosford home in April 2014.

It is believed the $4.95 phone charger sent a high-voltage electrical pulse into her phone, which transferred to the earphones she was using, connected to a laptop.

Justice Geoffrey Bellew told the court Ms Bi, as the "sole directing mind" of the company, had "failed to Inquire" about the compliance of items from the Flemington Markets supplier, where the chargers had been sourced at a minimal price.

"If she was purchasing items for such a paltry sum of money, she perhaps ought to have been put on notice [about their quality]," he said.

Justice Bellew described the Campsie business as an "unsophisticated operation," but noted that Ms Bi had changed suppliers since the 2014 incident, engaging a supplier "she thinks is more reputable".

The NSW Electricity (Consumer Safety) Act 2004 requires the testing, approval and marking of declared electrical articles prior to sale.

All electrical products sold in NSW must comply with the Act and its regulations to ensure they are designed and manufactured to meet Australian Standards.

Penalties for selling unapproved products include prosecutions with maximum penalties up to $55,000 and/or two years imprisonment for an individual and $550,000 for a corporation.

Defence barrister for Ms Bi and the Campsie business Ramesh Rajalingam, said Ms Bi was currently not working and needed assistance from her children to pay her mortgage.

"She did not take adequate steps...and was remiss in her obligation as director in appraising herself of the law [and] the need to be aware of regulation. After the offence she is remorseful," he said, but added, "there is difficulty in accepting genuity of her remorse."

Barrister for the Commissioner for Fair Trading Jehane Ghabrial said Ms Bi's affidavit was "consistent with [her] being sorry for being caught."

Justice Bellew has directed for any further submissions on behalf of Fair Trading to be submitted by be next Friday, with the defence given an additional week to respond.

A spokesperson for NSW Fair Trading said the department was unable to issue a comment until the proceedings were complete in two weeks.

Earlier this year, Fair Trading Commissioner Rod Stowe urged consumers to "avoid the cheap deal," following the seizure of thousands of counterfeit USB phone chargers in raids by NSW Fair Trading in April.

"There is a reason it is cheap. Cheap and unapproved electrical products pose a serious health hazard and are a false economy," he said.

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