Question of the Week #4

NEW TO OUR BLOG – A FEATURE WE CALL OUR QUESTION OF THE WEEK

We will be putting up a consumer product safety question each week. The answers will be forthcoming the following week along with a new question. Check back frequently and let us know if you have a question.

We recently posed Question #3:

A company has received several reports of injuries associated with the use of its product. The company has heard of the CPSC Fast Track Recall program and wants to know if it should participate in the program. What factors should the company consider before entering into the fast track program?

Response:

The Fast Track Program can be very effective in helping companies resolve product safety issues. Companies should seriously consider using the Fast Track Program if a product recall is necessary, especially in connection with product compliance under the new Consumer Product Safety Improvement Act of 2008.

The Consumer Product Safety Act (CPSA) requires that companies (manufacturers, importers, distributors and retailers) notify the Consumer Product Safety Commission (CPSC) if they obtain information that reasonably supports the conclusion that a product distributed in commerce (1) fails to meet a consumer product safety standard or ban, (2) contains a defect that could create a substantial products hazard to consumers, (3) creates an unreasonable risk of serious injury or death, or (4) fails to comply with a voluntary standard upon which the CPSC has relied.

Section 15b of the CPSA requires companies to “immediately” report product defects. The CPSC interprets this to mean that a company should report within 24 hours of obtaining information that a product violates a standard, contains a defect which creates a substantial product hazard, or creates an unreasonable risk of injury. The CPSC encourages companies to report potential product hazards even while their own investigations are continuing. However, if a company is uncertain whether information is reportable, the company may spend a reasonable time investigating the matter, but generally not exceeding ten working days.

It is noted that the CPSA also requires manufacturers to report information about settled or adjudicated lawsuits, if a particular products is the subject to three or more civil actions involving serious injury or death. The law also has separate reporting requirements for choking incidents involving children. The agency also requires reporting under its other jurisdictional laws (Flammable Fabrics Act, Federal Hazardous Substances, Act, Poison Prevention Packaging Act, Refrigerator Safety Act, Virginia Graeme Baker Pool and Spa Safety Act).

In order to facilitate rapid reporting and corrective actions, the CPSC adopted the Fast Track Product Recall Program. If a company reports a potential product defect and, within 20 working days of the notification, proceeds to implement with the CPSC a voluntary recall, the CPSC will not make a determination that the product contains a defect which creates a substantial product hazard. This program allows the CPSC and the company to work together on a corrective action plan, rather than spending time to investigate and determine whether a defect rises to the level of a substantial product hazard.

The Fast Track Recall Program provides for electronic submittal of an initial report to the CPSC. Thereafter, the company submits a corrective action plan for agency approval. While no two corrective action plans are identical, there are some common elements. Companies faced with a voluntary recall under the Fast Track program should be prepared to answer the following questions:

-What is the defect that causes the product hazard?

-What caused the product defect to occur?

-Where are the unsafe products? How may are there?

-Did the product fail to comply with a safety standard?

-Has the company discontinued shipments?

-Has the company notified retailers to stop sales?

-Does the company have a register of customers?

-Does the company have a press release to announce the recall?

-What other forms of public notice are needed?

-Does the company have a toll-free number to handle consumer calls?

-Does the company have an internet site to inform customers?

-Does the company have the personnel in place to handle the recall?

-Does the company have replacement parts?

-Does the comapny have the ability to exchange defective products?

-Does the company have a plan to ship replacement parts or products?

-How will distributors and retailers be participating?

-Can the company effectively monitor the recall effort?

-How is the company upgrading its quality control?

The objective of a Fast Track Recall is to locate all defective products as quickly as possible. This requires effective communication and coordination within the company so that defective products with consumers and in the chain or distribution can be retrieved, repaired or replaced.

CONCLUSION. The Fast Track Recall Program is an important tool for compliance with consumer product safety laws. We think the Fast Track Program will become especially important for compliance with the Consumer Product Safety Improvement Act of 2008 (CPSIA), especially for children’s products that are found to contain excess lead or phthalates or fail to meet the mandatory ASTM safety standards.

There is a new emphasis today on consumer product safety. Companies have to redouble their efforts and take a proactive approach to emphasize product safety, especially for products imported from overseas. Where products are found to be non-compliant with safety standards, the Fast Track program should be considered for compliance. The program has a good track record and can demonstrate that a company is committed to safety–which can have a strong influence on how consumers view a company and its product in the future.

Now for this weeks new Question of the Week #4

What are the new whistleblower provisions of the CPSIA and how might they affect my company?

Check back with us next week for our response. Also, let us know what you think of our blog and questions you may have about consumer product safety. MRK

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