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$700,000 Penalty for Failure to Timely Notify CPSC of Product Hazard

Monday, November 03, 2014
Sandler, Travis & Rosenberg Trade Report

The Consumer Product Safety Commission announced Oct. 30 that a California company has agreed to pay a $700,000 civil penalty to settle charges that it knowingly failed to immediately report a defect involving certain window shades with exposed inner cords. The company has also agreed to continue to maintain the compliance program and system of internal controls referenced in an earlier civil penalty settlement with the CPSC, which was designed to ensure compliance with the safety laws and regulations enforced by the Commission. 

Federal law requires manufacturers, distributors and retailers to report to the CPSC within 24 hours after obtaining information reasonably supporting the conclusion that a product contains a defect that could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety requirement enforced by the CPSC. However, the Commission notes that in this case the company did not file a full report until after it had received several consumer reports of problems with the shades and implemented three design changes in an attempt to eliminate the hazard. The company ultimately recalled the approximately 85,000 shades it imported and sold to consumers between January 2003 and November 2007.

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