Correction to This Article
The Regulators column in the June 13 Business section incorrectly described Donald Mays, Consumers Union's senior director of product safety, as saying portable heaters may leak carbon monoxide. Mays was referring to portable electric generators producing carbon monoxide.

Product Defects and Whether to Report Them

By Cindy Skrzycki
Tuesday, June 13, 2006

The Consumer Product Safety Commission has proposed new factors for determining when manufacturers have to report defective products to the agency. Some industry groups have pushed for and welcome the changes, while one commissioner and some consumer groups warn that the result may be less reporting of safety hazards.

The proposal would allow companies to take into account factors such as whether they complied with voluntary and mandatory safety standards and whether the product poses less risk because it is old and not being sold or used much anymore.

"This is a modest, but useful, attempt to provide guidance to the regulated community . . . on whether to report to the commission," said Charles A. Samuels , general counsel to the Association of Home Appliance Manufacturers .

"This will result in less information being relayed to the commission, and that's bad for consumers," countered Rachel Weintraub , director of product safety for the Consumer Federation of America .

The home-appliance and toy industries have been lobbying the CPSC since 2004 to spell out just which factors count in determining whether a product is unsafe and a candidate for a recall.

John " Gib " Mullan , the agency's director of compliance, said the purpose of the proposal "is to try to demystify the current rule." Mullan said it's ambiguous because it directs manufacturers, retailers and distributors to report to the CPSC when they can "reasonably support" that a product is defective.

Consumer groups complain that the main changes were proposed by industry groups and that they might have the effect of shifting blame for mishaps to consumers from manufacturers.

Companies are obligated to tell the agency immediately if they suspect a problem with a product, particularly if it poses the risk of serious injury or death. Most recalls are "voluntary" agreements, but the agency sometimes presses companies to make recalls and has the last word when it comes to imposing penalties.

Last year, the CPSC was responsible for some 400 recalls. About 27 percent of them were toy-related, and 7.5 percent were appliance recalls.

The agency assessed its largest civil penalty last year -- $4 million against Graco Children's Products Inc. for failing to report safety incidents, injuries and a fatality related to its products. The agency also has a new program for retailers to report defective products.

The calculations for determining defects now include factoring in the nature of the risk of injury, how the product will be used, who is exposed to the risk, case law and the commission's judgment.

The proposal adds four criteria: the obviousness of the risk, the adequacy of warnings from the manufacturer and instructions, consumer misuse of the product, and whether misuse was predictable.

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