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$5.5 Million Penalty for Failure to Report Fire Hazard

Monday, September 12, 2016
Sandler, Travis & Rosenberg Trade Report

The Consumer Product Safety Commission announced Sept. 8 that a U.S. company has agreed to pay a $5.55 million civil penalty for delay and misrepresentation in reporting a fire hazard associated with packaged terminal air conditioners and heaters. The company has also agreed to comply with and maintain (a) a program designed to ensure compliance with the Consumer Product Safety Act and (b) a system of internal controls and procedures.

The CPSC alleged that the company knowingly delayed reporting the fire hazard for about two years, misrepresented the number of fires that had occurred when it did ultimately report, and withheld notifying the CPSC of additional incidents it learned about after reporting. This “illegal, dangerous, and unacceptable” conduct “slowed down the announcement of a recall and put the safety of many families at real risk,” CPSC Chairman Elliot Kaye said.

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