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HP must pay $425,000 penalty for failure to report defect

HP has agreed to pay a $425,000 civil penalty to resolve allegations that it failed to report a product defect to the Consumer Product Safety Commission (CPSC).  The agency charged that, through October 2008, HP continued to sell laptops it knew contained defective lithium-ion battery packs. The packs overheated and, in some cases, caught fire.  At least one consumer was hospitalized with injuries.

Federal law requires that manufacturers immediately report known product defects to CPSC.  The agency alleged that, by September 2007, HP knew of 22 incidents with the battery pack, as well as the injuries to the hospitalized consumer.  Despite this knowledge, CPSC said, HP failed to report the defect.  The company continued to sell laptops containing the battery packs and also sold the packs individually.  According to CPSC, by the time HP reported the issue in July 2008,  the company was aware of at least 31 incidents involving the battery packs.  Finally, in October 2008, HP and CPSC announced a joint recall of 32,000 packs.

Although it has agreed to pay the penalty, HP denies that the packs pose an unreasonable risk of death or injury.  The company also denies violating the law.  For more on this case, visit the CPSC website.


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Children’s entertainment company agrees to pay $1.3 million penalty after failing to report serious product danger

Spin Master, a Toronto children’s entertainment company, recently agreed to pay a $1.3 million civil penalty to resolve allegations made by the Consumer Product Safety Commission (CPSC).   The company manufactures Aqua Dots, a children’s craft kit containing small beads that stick together when sprayed with water.  The beads contain several banned hazardous, toxic substances.  A number of children (and one dog) received emergency medical treatment after ingesting Aqua Dots.  CPSC alleged that Spin Master learned of these incidents in October 2007, but failed to report them to the Commission, in violation of federal law.

In the next few weeks, Spin Master allegedly continued to receive reports of children harmed by Aqua Dots.  However, no reports were made to CPSC.  In November 2007, CPSC received reports stating that two children had fallen into comas after ingesting Aqua Dots.  CPSC contacted Spin Master and, two days later, a recall was issued.

CPSC noted that Spin Master had hired a company to test the toxicity of the product, but the testing was considered inadequate.

Federal law requires companies like Spin Master to report to CPSC within 24 hours of receiving information on a potential product defect or danger.  Spin Master denied knowingly violating the law.  However, the company has agreed to pay the $1.3 million civil penalty.

Visit CPSC for more details and pictures of the toxic product.

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