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$5.7 Million Penalty for Product Safety Violations

Wednesday, September 06, 2017
Sandler, Travis & Rosenberg Trade Report

The Consumer Product Safety Commission reports that a U.S. company has agreed to pay a $5.7 million civil penalty to settle charges that it knowingly sold and distributed approximately 2,816 recalled products from 33 separate voluntary corrective actions from August 2012 through November 2016. The company will also maintain a compliance program to ensure compliance with the Consumer Product Safety Act, including a program for the appropriate disposal of recalled products, as well as a system of internal controls and procedures.

Federal law prohibits the sale, offer for sale, or distribution in commerce of a consumer product that is subject to voluntary corrective action, such as a recall, that has been publicly announced and taken in consultation with CPSC. However, according to an agency press release, the CPSC charged that the company’s procedures failed to accurately identify, quarantine, and prevent the sale and distribution of recalled products. These goods were sold and distributed in stores through traditional register lanes and special services desks as well as through sales for salvage from reverse logistic centers, internet sales, and donation programs.

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