Failure To Notify Government Of Faulty Consumer Products Costs Firms Millions

WASHINGTON, D.C. -- American corporations have paid $2,353,000 in civil penalties to the U.S. Treasury since 1985 to settle CPSC allegations that they failed to notify the federal government about defective consumer products they were manufacturing or importing.

According to the U.S. Consumer Product Safety Commission, it is currently seeking higher civil penalties than it generally has in the past.

In the most recent agreement, Club Car, Inc. of Augusta, GA, paid $225,000 to settle CPSC charges that the firm failed to report a defective battery-charging system in its electric-powered golf cars sold between 1982 and 1985.

Club Car denies both the allegation that the product had contained a defect and the allegation that there had been a failure to report.

"All manufacturers, importers, distributors and retailers of consumer products are bound by the reporting requirements of the Consumer Product Safety Act of 1972,11 according to Acting Chairman Anne Graham.

Under the law, each company is required to notify CPSC if it has reason to believe that a product either (1) fails to meet a consumer product safety standard or banning regulation, or (2) has a defect which "could create" a substantial hazard to consumers.

Timely reporting of potentially hazardous consumer products is essential for the CPSC to protect the public. A primary mission of the agency is to prevent injury and death.

Once identified to the Commission, a substantially hazardous product quickly may be rendered safe through the cooperative efforts of the CPSC and the companies involved.

A new handbook which details suggested company procedures notifying the government about defective consumer products implementing a recall of hazardous products has been prepared by CPSC.

To report a product defect which could create a substantial product hazard, or to obtain a free copy of the handbook, companies subject to the jurisdiction of the CPSC may phone the Division of Corrective Actions at (301) 492-6608.