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$3.85 Million Penalty for Failing to Disclose Product Defect

Wednesday, October 10, 2018
Sandler, Travis & Rosenberg Trade Report

The Consumer Product Safety Commission reports that a U.S. retail company has agreed to pay a $3.85 million civil penalty to resolve charges that it knowingly failed to report that a product it imported and sold contained a defect or created an unreasonable risk of serious injury. According to the CPSC, over an 18-month period the company received 92 complaints about the item, including 60 from consumers who received injuries, some serious, but did not notify the Commission immediately of the defect or risk. The company did later announce a recall of the goods with the manufacturer.

The CPSC states that in addition to paying the penalty the company has agreed to maintain a compliance program designed to achieve compliance with the Consumer Product Safety Act as well as a system of internal controls and procedures to ensure that it discloses information to the Commission in accordance with applicable law.

Any interested person may ask the CPSC not to accept this agreement or otherwise comment on its contents by Oct. 24.

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