|
previous article next article
Appliance Manufacturer LG Agrees to Pay Maximum $1.825 Million Civil Penalty
for Failure to Report Defective Dehumidifiers
JULY 22, 2015 Release Number: 15-193 WASHINGTON, D.C.—The U.S. Consumer Product
Safety Commission (CPSC) announced today that LG Electronics Tianjin Appliance
Co., Ltd., and LG Electronics USA Inc. (LG), agreed to pay a maximum $1,825,000
civil penalty. The civil penalty agreement settles CPSC staff’s charges
that LG knowingly failed to report to CPSC, as required by federal law, a defect
and an unreasonable risk of serious injury with several models of dehumidifiers.
Fires caused by the defective dehumidifiers resulted in millions of dollars of
property damage.
Due to a defective fan, the dehumidifiers overheated, smoked, melted or caught
fire, posing fire and burn hazards to consumers. Federal law required LG to
report to CPSC immediately about a consumer product containing a defect that
could create a substantial product hazard or presenting a risk of serious injury
or death.
Starting in 2003, LG received dozens of reports of the dehumidifiers catching
fire and causing extensive property damage to consumers’ homes. By the time the
dehumidifiers were recalled in 2012, LG was aware of 107 reports of incidents,
with more than $7 million in property damage and three reports of smoke
inhalation.
LG manufactured and imported about 795,000 of the defective dehumidifiers under
the Kenmore brand name. The dehumidifiers were recalled in 2012 and the recall
was reannounced in July 2013.
LG’s conduct occurred before August 2009, at a time when a maximum civil penalty
was $1.825 million. In addition to paying a civil penalty, LG has agreed to
maintain a compliance program designed to ensure compliance with the Consumer
Product Safety Act. Additionally, the Firm has agreed to maintain a related
series of internal controls and procedures. The compliance program requires
written standards, policies and procedures, including those designed to ensure
that information that may relate to or impact CPSC compliance is conveyed
effectively to personnel responsible for CPSC compliance.
The compliance program also must address:
- Confidential employee reporting of compliance concerns to a senior manager with
authority to act
- Effective communication of compliance policies and procedures, including
training;
-
Senior management and responsibility for, and general board oversight of,
compliance; and
- Requirements for record retention.
LG does not admit to CPSC staff’s charges.
The penalty agreement has been accepted provisionally by the Commission by a
vote of 4-1.
The U.S. Consumer Product Safety Commission is charged with protecting the
public from unreasonable risks of injury or death associated with the use of
thousands of types of consumer products under the agency’s jurisdiction.
Deaths, injuries, and property damage from consumer product incidents cost the
nation more than $1 trillion annually. CPSC is committed to protecting consumers
and families from products that pose a fire, electrical, chemical or mechanical
hazard.
CPSC's work to help ensure the safety of consumer products - such as toys, cribs,
power tools, cigarette lighters and household chemicals -– contributed to a
decline in the rate of deaths and injuries associated with consumer products
over the past 40 years.
Federal law bars any person from selling products subject to a
publicly-announced voluntary recall by a manufacturer or a mandatory recall
ordered by the Commission.
|