Under its punishment, Graco will be forced to pay $3 million immediately to the US Treasury and will spend $7 million over the next five years to improve child safety. Those steps can include strategies like finding ways to get more people to register their car seats, identifying safety trends in the industry and launching an awareness campaign. Regardless, this investment must be certified by a third-party or Graco is required to "pay the balance of the $10 million civil penalty," according to NHTSA.
"Parents need to know that the seats they trust to protect their children are safe, and that when there's a problem, the manufacturer will meet its obligations to fix the defect quickly," Transportation Secretary Anthony Foxx said in the fine's announcement.
The defective latches were blamed for at least one death when a two-year-old in California couldn't be removed when a car was on fire. There were also over 6,100 complaints registered against the products. Unfortunately, NHTSA estimates that only 40 percent of faulty car seats get repaired.
Graco will pay $3 million into U.S. Treasury and $7 million for new steps to improve child safety after failing to launch timely recall of defective seats
WASHINGTON – U.S. Transportation Secretary Anthony Foxx today announced that Graco Children's Products has been fined $10 million after the company failed to provide timely notification of a defect in more than 4 million car seats. Graco must pay a fine of $3 million immediately to the Federal Government and an additional $7 million is due in five years unless they spend at least the same amount on new steps to improve child safety.
The penalties close an investigation launched last year by the Department of Transportation's National Highway Traffic Safety Administration (NHTSA) into whether the company failed its obligations, under the National Traffic and Motor Vehicle Safety Act, to begin what ended up as the largest ever recall of child seats. The seats had buckles that could stick or become stuck in a latched position, potentially placing child occupants at risk in an emergency.
"Parents need to know that the seats they trust to protect their children are safe, and that when there's a problem, the manufacturer will meet its obligations to fix the defect quickly," Secretary Foxx said. "Today's action reinforces that responsibility in a way that will make our kids safer for decades to come."
Graco will create a plan and procedures for addressing certain targeted performance requirements, which may include methods to increase effectiveness of consumer product registration of car seats, which allows parents to be notified of defects, identifying potential safety trends affecting car seats industry wide and launching a child safety awareness campaign. According to NHTSA, on average, only 40 percent of people who have recalled car seats get them fixed. That's in comparison to an average of 75 percent of people who have recalled light vehicles, for which registration is required by law.
The company also must provide certification from an independent, third-party that it has met its cost obligations; if Graco fails to meet those obligations, it must pay the balance of the $10 million civil penalty.
"Today's action uses NHTSA's enforcement authority to not only hold a manufacturer accountable, but to keep our kids safe," said NHTSA Administrator Mark Rosekind. "It's another example of our commitment to use every tool available to save lives on our highways, and to use those tools in an innovative and more effective way."
The National Traffic and Motor Vehicle Safety Act states that once a manufacturer knows or should reasonably know that an item of motor vehicle equipment, such as a car seat, contains a safety related defect, the manufacturer has a maximum of five business days to notify the agency. Once it notifies NHTSA of a defect, it is required to launch a recall.
Under the consent order issued today, Graco admits that it did not provide the required defect notice. Under pressure from NHTSA, Graco recalled more than 4 million convertible and booster seats with defective buckles in February 2014, and nearly an additional 2 million rear facing infant seats in June. NHTSA launched an investigation into the timeliness of Graco's decision making and reporting of a defect in those recalls in December.
With this consent order, Graco is required to pay a $3 million civil penalty, and to commit at least $7 million to meet targeted performance obligations, over the next five years. Those obligations may include:
· Improving its assessment and identification of potential safety defects.
· Creating a scientifically tested program to increase effectiveness of child seat registration programs.
· Revising its procedures for addressing consumer safety complaints and speed the recall of defective products.
· Launching a campaign to disseminate safety messages to parents and caregivers by producing media products to incorporate in child safety campaigns.
Read the consent order with Graco here.
Read about NHTSA's investigation of Graco car seat latches here.
Read about NHTSA's investigation into whether Graco met its obligation to make timely notification of a safety defect here.
Consumers can learn more about registering their car seats to ensure they receive notifications regarding safety recalls here.