Growing Number of Companies Fined For Failing to Report Product Defects

When companies learn of a dangerous product flaw, they have a duty to alert the authorities. Yet, there was a startling rise in the number of firms that tried to dodge this responsibility in 2011.


April 20, 2012 /24-7PressRelease/ — Every day, you rely on thousands of manufactured products. From the brakes on your car to the bed you sleep in, somewhere down the line a company had to design, construct and test the items that fulfill your basic needs.


Although most products are safe, sometimes hazardous items slip through the cracks and enter the stream of commerce. Defective products are responsible for thousands of injuries every year.


When a company finds out that one of its products presents a danger, they are required to take measures to protect the public. Yet, the latest numbers show that companies are becoming increasingly tightlipped about big product defects.


Defective Product Reporting Requirements


The Consumer Product Safety Commission is the federal agency responsible for publicizing information on recalled products. Under the terms of the Consumer Product Safety Act, manufacturers, distributors, importers and retailers are all required to report potentially hazardous products to the CPSC once they become privy to information that reasonably supports the conclusion that a product:


– Fails to meet a consumer product safety rule, standard or ban;

– Contains a defect that could create a substantial product hazard; or,

– Creates an unreasonable risk of serious injury or death


Information that can give rise to reporting responsibility arises in many ways, from internal quality control data to customer complaints. Generally, companies must make a report to the CPSC within 24 hours of the receipt of such information.


Reporting Failures Increased Fivefold In the Span of a Year


The CPSC is empowered to levy fines against companies that fail to file a timely report regarding a product defect. In 2010, the CPSC used this power against only two companies for a combined penalty of just over half a million dollars.


In 2011, however, the number of companies penalized for their sluggish response to product defects skyrocketed to ten. This time, the total annual fines topped the $4 million mark.


A Lawyer Can Help You Hold Negligent Manufacturers Responsible


The disturbing trend towards more defective product cover-ups is bad news for consumers. But, CPSC fines are not the only way to combat marketers of dangerous items. If you or a loved one has been injured by a product due to a design flaw, a fault in the manufacturing process or a failure to provide adequate warnings about known dangers, you may be entitled to monetary damages. Call a defective products lawyer to learn more about your right to compensation from makers of unsafe products.


Article provided by The Kreeger Law Firm

Hong Kong amends Juvenile & Toy Safety Standards

Effective from April 1, 2012, Hong Kong has recently updated two toy safety standards and realigns the standards to reflect changes to European, Australia/New Zealand and United States standards for eight children’s product categories.

The government of Hong Kong published the Toys and Children’s Product Safety Ordinance (Amendment of Schedules 1 and 2) Notice 2011 in its gazette on December 30, 2011 as. This notice updates two safety standards for toys and some of the standards for eight types of children’s products.

This amends chapter 424 of the Laws of Hong Kong by providing an update to the Toys and Children’s Product Safety Ordinance and Regulations. According to product type, the Hong Kong regulations ( specify that toys and children’s products for domestic use should comply with one of several major international toy safety standards. These include British standards enacting European norms (BS EN), American international standards (ASTM); Australia/New Zealand harmonized joint standards (AS/NZS) as well as standards of the International Standards Organization (ISO).
Toys represent a wider category and various types of toy fall under a mixture of ISO and BS EN standards. A similar situation exists for playpens, where ASTM and BS EN standards are employed. The types of children’s products that are regulated purely referring to ASTM standards include baby walking frames, cots, high chairs and child safety barriers. Those regulated by AS/NZS standards are confined to bunk beds, while children’s paints are regulated by ISO.

The changes generally align existing Hong Kong regulations to the latest revisions of the referenced standards. As examples of realignments, bunk beds for domestic use are amended from AS/NZS 4220:2003 to AS/NZS 4220:2010 and children’s paint from ISO 8124-3:1997 to ISO 8124-3:2010.

For the local market, Hong Kong requires of products that need consumer warnings to have labels and instructions written in both English and Chinese.

Product Safety Conference Concludes with CPSC Chairman Keynote Address

Yesterday was the last full day of the 2012 ICPHSO Annual Meeting and Training Symposium.

The day featured a keynote by U.S. Consumer Product Safety Commission (CPSC) Chairman Inez Moore Tenenbaum (pictured delivering the keynote)

   Some of her key points:

  • CPSC is being proactive at ports.  In 2010 & 2011, 6.5M units of over 2,000 products were seized.
  • Independent 3rd party testing is set up and running well.
  • A strong CPSC is good for business – it provides a more level playing field.
  • Standards development, recalls process, and federal rulemaking will be priorities in 2012.
  • Successful public database will have one year anniversary on March 11.  It has had 6,300 unsafe product reports.

Penalties and Enforcement
Also featured was a panel on Penalties and Enforcement, featuring Cheryl Falvey, U.S. CPSC General Counsel.  Some of the points made there:

In August 2009, the maximum penalty went from $1.8M to $15M.

If the duty to report occurred in 2008 but was not reported until 2010, the violation occurred in the higher penalty period.

A failure to report and the deliberate subsequent sale of recalled product doubles the maximum penalty to $30M.

There has been less self-reporting and more anticipated litigation since the penalty increase.

There is no formula to calculating a penalty.  Statutory factors include:

  • Nature
  • Circumstance
  • Extent and gravity of the violation

Other factors include:

  • Safety/compliance program
  • History of noncompliance
  • Economic gain for noncompliance
  • Failure to respond timely to staff requests

Every settlement is subject to approval by CPSC commissioners.  Then it is listed in the Federal Register for public comment.

The CPSC is looking for a case that makes a statement.  “This has a deterrent effect,” says Falvey.

Individuals are now being pursued for felony criminal penalties.  This often happens with Subchapter S corporations, where the individual is virtually the same as the corporation.

The CPSC can be creative.  E&B Giftware was given a $550,000 civil penalty, with all but $50,000 suspended if they met requirements of the settlement.

The whistleblower provision in the Consumer Product Safety Improvement Act (CPSIA) of 2008 has only been used once.  Calls are more likely to be a trade complaint from a competitor.

CPSC Chairman Inez Tenenbaum Delivers Keynote at Toy Fair

From Toy Industry Association (TIA)

February 14, 2012 | Consumer Product Safety Commission (CPSC) Chairman Inez Tenenbaum spoke to an audience of more than 300 toy industry stakeholders this morning in a keynote address delivered at the Toy Industry Association’s (TIA) annual Toy Safety Compliance Update.

Chairman Tenenbaum shared the CPSC’s progress in 2011 – including the long-anticipated amendments to the Consumer Product Safety Improvement Act (CPSIA) last August– before discussing the Commission’s goals for 2012, which include “education and prevention over reaction and recalls” and the importance of “toy safety by design.”

While the CPSC has made headway alongside Homeland Security inspectors in monitoring the ports to detect and detain shipments that contain violative toys, Chairman Tenenbaum stated that companies must do their part to ensure safety through sound design – especially considering nearly 20 billion toys are imported annually to the U.S. from China. “The final design needs to be right, every time,” she said, adding that design flaws are the chief cause of injuries and recalls.

During her 45-minute address, Chairman Tenenbaum noted that the CPSC “still has a lot of work to do in educating everyone in the industry … from manufacturers and importers to wholesalers and retailers” about the latest toy safety requirements.  The CPSC is currently involved in ongoing conversations with several institutions of higher learning to explore the development of certification programs related to best manufacturing processes in China, in the hopes of educating and training a future generation of experts in supply chain management.

In closing, Chairman Tenenbaum stated that she believes “2012 will be another successful year for toy safety” and urged the audience to “take the necessary steps [to comply with the CPSIA] now so that children are safe and happy when your toys reach their hands.”

“I want statistics for injuries and recalls to decline this year, and I just know that the industry is up for this challenge. From New York to Hong Kong and everywhere in between, I want us to be partners …We’re here to educate, inform and empower you to ensure that your products comply with the law.”

Immediately following the Chairman’s address, CPSC Small Business Ombudsman Neal Cohen spoke to the crowd, discussing the various resources available to toy companies through the Small Business Ombudsman office as well as updates to the CPSIA and the recent changes to the U.S. Toy Safety Standard F963.

Held from 9:15 a.m. to 12:30 p.m. at the Jacob K. Javits Convention Center during Toy Fair, the educational seminar also included presentations by Joan Lawrence, TIA vice president of standards and government affairs, who provided detailed information on toy safety standards, laws and compliance requirements in the U.S. and abroad and Al Kaufman, TIA senior vice president of technical affairs, who provided details about the newly revised F963 toy safety standard and practical tips on compliance. Federal and state legislative updates were also provided by TIA’s external affairs team, as well as information on Canadian EPR Legislation.

This is a post with post format of type Link

Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Aenean commodo ligula eget dolor. Aenean massa. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Donec quam felis, ultricies nec, pellentesque eu, pretium quis, sem. Nulla consequat massa quis enim.

Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Aenean commodo ligula eget dolor. Aenean massa. Cum sociis natoque penatibus.

This is a standard post format with preview Picture

Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Aenean commodo ligula eget dolor. Aenean massa. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus.

Donec quam felis, ultricies nec, pellentesque eu, pretium quis, sem. Nulla consequat massa quis enim. Donec pede justo, fringilla vel, aliquet nec, vulputate eget, arcu. In enim justo, rhoncus ut, imperdiet a, venenatis vitae, justo. Nullam dictum felis eu pede mollis pretium. Integer tincidunt. Cras dapibus. Vivamus elementum semper nisi.

Read more

ASTM Toy Safety Standard F963-11 Is Issued

Updates Address Heavy Metals, Compositing, Bath Toy Projections and More

PR Newswire

WEST CONSHOHOCKEN, Pa., Dec. 16, 2011 /PRNewswire/ — As part of its continuing efforts to proactively address potential toy safety issues, ASTM International Committee F15 on Consumer Products has approved revisions to ASTM F963, Consumer Safety Specification for Toy Safety. Changes made to the standard include revisions to the section on heavy metals, the introduction of compositing procedures, and new safety requirements and technical guidance for bath toy projections, acoustics and other potential safety hazards in toys.

ASTM F963, under the jurisdiction of Subcommittee F15.22 on Toy Safety, includes guidelines and test methods to prevent injuries from choking, sharp edges and other potential hazards. The standard is reviewed and updated on a regular basis by the subcommittee, which includes technical experts from academia, consumer groups, industry and government.

“These revisions build on the already comprehensive F963 standard by proactively addressing areas where potential risks or opportunities for harmonization have been identified,” says Joan Lawrence, F15.22 chairman and vice president, standards and government affairs for the Toy Industry Association (TIA).

Revisions now approved for F963 include the following:

  • Heavy Metals — Limits for heavy metals in toy substrates have been added to the existing surface coating requirements. A soluble approach for determination of heavy elements in toys and toy components has been maintained as this has been demonstrated to be more closely correlated than total content with the amount of element which is bioavailable, and therefore with risk of toxicity.
  • Compositing Procedure for Total Heavy Metal Analysis — Revisions outline detailed procedures for accomplishing this end by specifying the conditions under which compositing is allowable, when a composite result may be relied upon without further testing, and when testing of individual samples must subsequently be performed.
  • Bath Toy Projections — Revisions are intended to address the potential hazards that may be presented by vertical, or nearly vertical, rigid projections on bath toys. This requirement is intended to minimize possible puncture or other hazards to the skin that might be caused if a child were to fall on a rigid projection.
  • Among other revised areas of the standard are sections on jaw entrapment; toys with spherical ends; stability of ride on toys; requirements for squeeze toys attached to rings; use of cords, straps and elastics; packaging film; and yo-yo tether balls.

As part of the landmark Consumer Product Safety Improvement Act (CPSIA) of 2008, the U.S. Congress endorsed both the F963 standard and the process under which it is developed and continually reviewed and revised. If the CPSC agrees that the revisions improve safety, ASTM F963-11 will replace the 2008 version of the standard as federal law in 180 days.  For more information about the CPSIA and compliance with this law, visit the CPSC Web site,

ASTM International standards are available for purchase from Customer Service (phone: 610-832-9585; or at

ASTM International welcomes and encourages participation in the development of its standards. ASTM’s open consensus process, using advanced Internet-based standards development tools, ensures worldwide access for all interested individuals. For more information on becoming an ASTM member, please contact Leonard Morrissey, ASTM International (phone: 610-832-9719;

For technical Information, contact: Joan Lawrence, Toy Industry Association, New York, N.Y. (phone: 212-675-1141;

Follow ASTM Consumer Products news on Twitter @ASTMProductsRec.

Established in 1898, ASTM International is one of the largest international standards development and delivery systems in the world. ASTM International meets the World Trade Organization (WTO) principles for the development of international standards: coherence, consensus, development dimension, effectiveness, impartiality, openness, relevance and transparency. ASTM standards are accepted and used in research and development, product testing, quality systems and commercial transactions around the globe.

View this release on the ASTM Web site at

ASTM PR Contact: Barbara Schindler, Phone: 610-832-9603;

Read more:

Heads-up – New CPSC On-line Reports Pose New Risks for Manufacturers

Nov 16, 2011

By Lee L. Bishop / Product Safety Letter
On Nov. 8, 2011, The Consumer Product Safety Commission (“CPSC”) formally announced two changes to its on-line reporting tools, changes that had been implemented without fanfare several weeks ago. First, the CPSC has stopped its practice of notifying manufacturers via regular mail of consumer complaints that do not qualify for inclusion in the on-line database. Those complaints will now be accessible to manufacturers (not the public) in a separate tab at the same website housing the searchable database. Second, the CPSC has changed its on-line form used to file initial reports of product defects under Sec. 15(b).

The CPSC press release characterizes these changes as simply a more efficient way to handle consumer complaints, and an “easier” way to report potential product hazards.

No, not really. These two changes present real risks and challenges for manufacturers.

Section 6(c) Information

The first change is not objectionable on its face, but manufacturers must remain vigilant that it is not misused. Some consumer complaints do not qualify for inclusion in the database for a variety of reasons; for example, they may complain of a non-safety problem, or they could not contain the required consumer contact information or verification. These complaints (called “Section 6(c) information”) have been mailed to manufacturers for comment under the process described in 16 C.F.R. Part 1101. They can be obtained by the public only through the Freedom of Information Act.

Now these complaints are on-line, available only to manufacturers as a separate tab on the website. They will no longer be mailed to manufacturers – if you wish to see and comment on these complaints, you must register on Remember that these Sec. 6(c) complaints are subject to different rules than the new Section 6A complaints. Section 6(c) complaints can only be obtained through a Freedom of Information Act request, and manufacturers can object to their release pursuant to the Part 1101 rules.

Section 15(b) Report Form

For several years the CPSC has encouraged the use of an on-line form to report potential Section 15(b) product hazards. The previous form had open fields for critical information, such as the nature of the defect and how the reporter learned of the potential issue. Since reports are normally filed early in the investigation process, as required by the CPSC’s guidelines, often this information is preliminary, tentative, or simply not available. The form was used to start the process of either conducting a Fast Track recall or developing the facts necessary to support a “preliminary determination” of product hazard by the CPSC staff. The manufacturer would provide more complete information in its Full Report.

The new form is significantly different. It requires that the reporter state a precise date when the issue was discovered – it is not possible to file the report without this critical fact. Given the CPSC’s practice of evaluating every Section 15(b) report for a “late reporting” penalty, and the higher penalty authority provided in the 2008 CPSIA, the date a potential product hazard was discovered has significant legal consequences and should not be volunteered without careful thought and analysis.

The new form also requires that the reporter pick from a “drop-down” menu of “primary” and “secondary” hazards, including “electrocution/electrical shock” or “fire.” Moreover, the report form requires that the reporter pick precise numbers of products involved, their date of production and importation as well as their precise location in the distribution process.

In addition, the new form significantly limits the amount of text available in some of the fields. As a result, it is no longer possible to include the full text of the denial of substantial product hazard as allowed by 16 C.F.R. §1115.12(a).

If manufacturers do not have the information required by the new form, or if they want to formally document the denial of a substantial product hazard (which can be important for a number of reasons) they should consider reporting the old fashioned way – by phone or email containing a letter (in pdf format).

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, or its client. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

Lee L. Bishop is of counsel with Miles & Stockbridge. For 16 years prior to that he was Senior Counsel for Product Safety and Regulatory Compliance for GE consumer products, lighting and electrical industrial equipment. Contact him at (502) 213-0000, lbishop@milesstockbridge.


Pointlessly dangerous toys, 2011 edition

TUESDAY, NOVEMBER 22, 2011  Jeff Gelles- Philadelphia Inquirer

Toys made with lead and phthalates continue to pose needless risks to U.S. children, according to the annual “Trouble in Toyland” report from U.S. PIRG.  Its findings are worth keeping in mind this holiday season as you shop or unwrap gifts for your kids  – especially for the babies and toddlers most as risk.

You can find the report here. U.S. PIRG says this year’s key findings include:

Lead Continues to be a Hazard in Toys

Exposure to lead can affect almost every organ and system in the human body, especially the central nervous system. Lead is especially harmful to the brains of young children and has no business in children’s products.

This year our investigators found 2 toys whose lead levels exceeded the current 300ppm standard set by the [Consumer Product Safety Improvement Act] and one additional toy that exceeded its prospective 100ppm standard; we found 4 additional toys that exceeded the American Academy of Pediatrics recommendation that lead levels in toys should not exceed 40ppm.

Phthalates in Toys

Numerous studies have documented the potential negative health effects of exposure to phthalates in the womb or in child development. U.S. EPA studies show the cumulative impact of different phthalates leads to an exponential increase in harms including premature delivery and reproductive defects. The CPSIA permanently banned toys containing three phthalates and set temporary limits on three others, while tests continue. No toy or childcare article can contain more than 1000ppm of each of the six phthalates.

This year, we found two toys that laboratory testing showed to contain 42,000 ppm and 77,000 ppm levels of phthalates. These products exceed limits allowed by the CPSIA by 42 and 77 times, respectively.

Choking Hazards

Choking on small toy parts, on small balls, on marbles and balloons continues to be the major cause of toy-related deaths and injuries. Between 1990 and 2010, over 200 children died from a choking incident.

This year we found several toys that violated CPSC’s small parts for toys standard intended for children less than 3 years old. We also found “near small part” toys that – while not in violation of current regulations – support our call for the small parts test to be made less permissive. Finally, we found toys intended for older children that failed to provide choking hazards warnings required for small parts or small balls.

Noisy Toys

Research has shown a third of Americans with hearing loss can attribute it in part to noise. The third National Health and Nutrition Examination Survey showed one in five U.S. children will have some degree of hearing loss by the time they reach age 12; this may be in part due to many children using toys and other children’s products that emit loud sounds such as music players. The National Institute on Deafness and other Communication Disorders advises that prolonged exposure to noise above 85 decibels will cause gradual hearing loss in any age range.

We found 1 toy on store shelves that exceeded the recommended continuous exposure to 85-decibel limit and 2 close-to-the-ear toys that exceeded the 65 decibel limit when measured with a digital sound level meter.

As often happens, the toys singled out by U.S. PIRG tend to be inexpensive – this year’s top price is $11.99 – and seemingly innocuous.  And it’s true that the annual report draws some criticism as alarmist, perhaps because of its perennial title.

This year is no exception. Even before U.S. PIRG released this year’s report, the Toy Industry Association was ready with a statement warning: “During the holiday season, consumers are frequently targeted by activists who take advantage of the high visibility of toys and the opportunities they offer for media coverage.”

The TIA says:

The reports of such organizations ignore that toys are highly regulated and do not contain hazardous substances to which children may be exposed. They ignore that the U.S. government consistently lists toys among the safest of 15 common consumer product categories in the home. And they ignore that less than half of one percent of the estimated three billion toys sold each year in the United States are recalled.

You can read the rest of TIA’s statement here, and the group’s own safety advice here. The organization is right to recommend that toy risks be understood in their context, but wrong to say flatly that toys “do not contain hazardous substances to which children may be exposed.”

Plainly, sometimes they do – if you have any doubts, look at the Consumer Product Safety Commission’s list of toy recalls, which includes the recall of lead-painted toy cars as recently as Sept. 28.  And take note of the math: Less than half of 1 percent sounds low, but the group could also say “fewer than 30 million toys.” (Actually, I’d be surprised if the number were anywhere near that high.)

More to the point, the relative rarity of problem toys, and their low prices and ordinariness, are sort of the point.

Yes, most toys sold in the United States are safe. But at least a few aren’t, and the results can be tragic.  Do you want someone you love needlessly exposed to choking hazards or to risky substances such as lead, phthalates or cadmium?

As always, “Trouble in Toyland” contains a wealth of information about real risks in the marketplace that are easily overlooked, including toys that violate legal standards or recommendations of authorities such as the American Academy of Pediatrics. The report may reflect the perspective of “activists,” but it’s also a good primer on the underlying policy debates over how to best limit risks imposed on consumers by the occasional manufacturer or importer who violates the rules or pushes the limits.

“Trouble in Toyland” is worth a look. Again, you can find it here.

Read more:


                                                                                                                                                                                                                     FOR IMMEDIATE RELEASE                 Contact:  Bill Jacoby,


Proprietary CORE Audit™ Evaluates Operational Readiness and Uncovers Compliance Issues

Wilmington, DE (November 15, 2011) – H.R.2715 Bill of the Consumer Products Safety Improvement Act (CPSIA) becomes Federal Law on January 1 with promises of strict enforcement by CPSC Commissioner Nancy Nord.  With manufacturers at risk of facing fines of $100,000 per violation, companies are faced with the challenge of navigating and understanding the evolving regulations to ensure readiness.  Fulfilling a much needed resource, manufacturing industry veteran Bill Jacoby offers his 10 plus years of experience and knowledge in operations and compliance to help companies by auditing their operations and manufacturing processes and offering solutions for areas that need to be addressed.

“We’ve developed a process intent on preventing expensive mistakes,” said Bill Jacoby, president and founder of Jacoby Solutions.  “The process identifies any weaknesses and gives the company the ability to troubleshoot and create solutions that ensure full CPSIA / CCPSA compliance.”

Jacoby developed the CORE Audit (Compliance Operations Readiness Engagement Audit), the company’s proprietary approach to business operations readiness.  The audit covers sixteen operational areas including Quality Control, Labeling and Tracking, Issue Escalation, Documentation & Record Keeping, and Incident Reporting as well as CCPSA readiness reporting areas that they are compliant and revealing areas that need immediate attention.

“What many companies don’t realize is that compliance does not stop at testing,” said Jacoby.  “And unfortunately, many businesses do not have the resources in house to decipher the changing law as it relates to their daily business operations.”

To fulfill this need, Jacoby Solutions serves as an affordable resource and consultant to small and medium companies in the juvenile, toy and craft and hobby manufacturers producing products domestically or abroad.  Services will be extended to other consumer product categories in Q1, 2012.

About Jacoby Solutions: Business Transformation With An Eye On Compliance™

Jacoby Solutions is a product-centric consulting practice specializing in “ CPSIA operational readiness,” ongoing CPSIA and CCPSA compliance and operational efficiencies via improved process and systems.  A one-stop shop for manufacturing and distribution companies in need of a partner who can help them evolve their business while keeping an eye on compliance, Jacoby Solutions saves companies time and resources by helping them become operationally sound in all areas from manufacturing and distribution to supply chain management and customer service.  Founder and principal, Bill Jacoby has held executive management positions in business operations since 1987 with large corporate and small businesses alike including the last seven years in the juvenile products category.  For more information, go to www.jacobysolutions or email