Consumer Product Safety Act

Consumer Product Safety Act

The Consumer Product Safety Act states that any company that receives numerous complaints about a products defects must report these claims to the CPSA. According to the CPSA reporting responsibilities belong to manufacturers, importers, distributors and retailers of consumer products. Each is required to notify the Commission if it obtains information which reasonably supports the conclusion that a product fails to comply with a consumer product safety standard or banning regulation. Also if the product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury, or death to the consumer.

The Commission's interpretative regulation explains the company's obligations and those of the Commission.. This requires manufacturers of a consumer product to report to the Commission if a particular model of a consumer product is the subject of three civil actions that have been filed in Federal or State court, each suit alleges the involvement of that model in death or serious injury to the body. Then at least three of the actions will result in a final settlement involving the manufacturer; or in a judgment for the plaintiff within any one of the two year periods specified. The first two year period began to run on January 1, 1991 and ends on December 31, 1992. The second two year period starts on January 1, 1993; the third, on January 1, 1995; and so forth. Manufacturers must file a report within 30 days after the settlement or judgment in the third civil action to which the reporting requirement applies.

Why is the reporting required? The intent of Congress was to encourage widespread reporting of potential product hazards. Congress sought not only to have the Commission uncover substantial product hazards, but also to identify risks of injury which the Commission could attempt to prevent through its own efforts, such as information and education programs, safety labeling, and adoption of product safety standards. Although CPSC relies on sources other than company reports to identify substantial product hazards, reporting by companies is invaluable because firms often learn of product safety problems long before the Commission does. For this reason, any company involved in the manufacture, importation, distribution or sale of consumer products should develop a system of reviewing and maintaining consumer complaints, inquiries, product liability suits and comments on the products they handle.

If a firm reports to the Commission it does not necessarily mean there is a substantial product hazard. The CPSC simply requires firms to report whenever a product fails to comply with a consumer product safety rule, fails to comply with a voluntary standard upon which the Commission has relied, contains a defect that could create a substantial product hazard, or creates an unreasonable risk of serious injury or death. Thus, a product does not need to actually create a substantial product hazard to fit the reporting requirement.

It is the Commission's view that a firm should take the first step of notifying the Commission when the information available to the company reasonably indicates that a report is required. It is in the company's interest to assign the responsibility of reporting to someone in executive authority. The individual's knowledge of the product and the reporting requirements are valid reasons for assigning the responsibility.

A company is considered to have knowledge of product safety information when such information is received by an employee or official of the firm who may reasonably be expected to be capable of appreciating the significance of that information.