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Haier America Trading Agrees to $850,000 Civil Penalty for Failure to Report Defective Blenders

If you're wondering why so many companies announce voluntary recalls, it's because they essentially are required. When a manufacturer learns that its product is defective and that it may cause injury to the consumer, they are required to notify the United State Consumer Product Safety Commission (U.S. CPSC).

The next step is for the U.S. CPSC to work with the company to facilitate a recall as appropriate. The recall is then announced by the company and the U.S. CPSC, with instructions for the consumer. It is illegal for the recalled product to be sold without correcting the defect. As a result, it might seem appealing for a company to simply not notify the U.S. CPSC, hoping any reports of injuries were anomalies--not a good idea! When that happens, the U.S. CPSC can bring an enforcement action against the company, which is generally settled with a civil penalty.

This past week, we saw just such a settlement issue between the U.S. CPSC and Haier. Haier makes household applieances, including a blender which had a problem with its blade flying off during use, sometimes breaking the blender glass and causing injury. Although Haier learned of the defect in 2007, it wasn't until 2009 that they fully notified the U.S. CPSC. During that time, there were 60 incidents reported to the company, including one which injured a consumer's hand.

In the settlement agreement, Haier paid $850,000 in a civil penalty and did not admit any fault or wrongdoing. Haier distributed 54,000 of the subject blenders, which were recalled in December 2009.

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