At the height of the Christmas clearance sales, the Consumer Product Safety Commission announced a deal that was no bargain for consumers: instead of filing its lawsuit seeking the recall of ATVs ("all-terrain vehicles") as imminent hazards, it entered into a preliminary settlement with the manufacturers (final consideration by CPSC is scheduled for mid-February). Unfortunately, the deal the commission made was as poorly designed and dangerous for consumers as the ATVs themselves. And Terrence Scanlon's defense of the agreement {Free for All, Jan. 16} offered little justification for such a weak settlement.

We've all seen one of these colorful three- or four-wheeled vehicles racing down a dirt path alongside the highway as we headed to the beach, or watched commercials featuring smiling kids tearing around in the rugged outdoors. Large, puffy balloon tires, fresh air, no traffic -- what safer fun could a kid have? Already 2.3 million of these vehicles have found their way into American homes, most with youngsters under 16.

The commission's staff examined the vehicles and found them far less friendly than they look. Because of several unique design characteristics, ATVs can veer out of control without warning, hurling rider and machine at speeds up to 50 mph helter-skelter into an unforgiving environment full of bumps, potholes, rocks and tree stumps. Too often, the 300-pound vehicle lands on top of the rider. Amid all the claims of fun, the down side has been devastating: 900 deaths and 330,000 injuries (requiring emergency room care) alone since 1982, almost half to kids younger than 16.

The commission studied the problem so long it came dangerously close to suffering paralysis by analysis. Finally, in December 1986, it voted (Scanlon dissenting) to curb the carnage by asking the Justice Department to seek, among other things, a recall of all three-wheeled models and four-wheelers sold for use by kids under 16. But no legal action has taken place since the vote.

Now, one year later, a settlement has been reached. Scanlon boasts that CPSC "sought -- and, thankfully, got -- a halt to {the} sale of the three-wheeled models." Actually, manufacturers simply agreed to encourage retailers to not sell last year's three-wheelers left in stock. The industry had already stopped manufacturing these products. The commission can hardly call this a concession.

Unfortunately, the agreement does not include recall, even though one manufacturer made such an offer. Instead of offering to design less hazardous new products or recalling the known hazard, the industry promises to set up a nationwide program to teach new and recent owners how to survive the risks of using an ATV. Even though the classes are free, they are voluntary.

It's hard to imagine hundreds of thousands of riders, many between 10 and 16 years old, herding into classes across the country. It is patently naive -- indeed, irresponsible -- to believe such a strategy can substantially reduce the continuing rate of death and injury.

So what happens to the 1 million or so consumers who bought an ATV thinking it was a great toy for their youngsters? Without a substantial incentive to return the product, few consumers are likely to park their $1,500 to $2,000 investment in the garage until Junior gets old enough to ride it properly. Sadly, the same population that has already suffered hundreds of deaths and thousands of injuries remains at risk and can't help piling up more gruesome statistics.

Perhaps the most troubling part of the agreement is the provision that new buyers sign a declaration that they fully understand the dangers and will abide by 12 safety precautions. It's reasonable enough to advise consumers never to drive at "excessive speeds"; never do "wheelies, jumps or other stunts"; never drive an ATV without proper instruction; and always be "extremely careful when approaching hills, turns and obstacles." But having the parent sign a promise to comply with each and every warning as well as a statement acknowledging "that failure to obey these warnings could result in death or severe bodily injury" will do little to affect how a 12-year-old will actually use the machine. Worse, instead of protecting the consumer, the signed declaration will help protect the manufacturer from liability when injury does occur. Federal endorsement of such a scheme will only make it more damaging.

This agreement has no teeth -- no required measures of performance and no sanctions for noncompliance by retailers -- and only vague promises by manufacturers to use "best efforts" in carrying out its terms. Industry's offer was, however, entirely predictable. After all, the program doesn't cost much, and the manufacturers blame the kids' behavior to begin with.

But for a majority of the commissioners to accept such a pathetic remedy is deeply disturbing. As leaders of the principal agency responsible for product safety, they have both the authority and the resources to carry out their mandate vigorously -- what they lack is the will to act. Scanlon's hand-wringing over the threat of a prolonged battle to protect consumers is no excuse for the agency to shrink from its responsibility. Given the serious and widespread nature of the hazard, the preliminary settlement is unacceptable. Should it become final, the public will be poorly served. R. David Pittle

The writer, a former Consumer Product Safety commissioner, is technical director of Consumers Union, publisher of Consumer Reports.