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This chapter contains information to familiarize companies with their
reporting obligations under the Consumer Product Safety Act (CPSA).
Companies that distribute consumer products subject to the provisions of
the Federal Hazardous Substances Act (FHSA), Flammable Fabrics Act
(FFA), Poison Prevention Packaging Act (PPPA), and Refrigerator Safety
Act (RSA) also must comply with these reporting requirements. The
information which follows will help you to recognize potentially
hazardous consumer products at an early stage, and will assist you in
understanding when you are legally obligated to report information about
the product to the Commission.
The information contained in this Handbook does not replace the
Commission Statutes or Commission Interpretative Regulations set forth
in 16 C.F.R. parts 1115 and 1116. For more information about reporting,
see also the Commission's Statement of Enforcement Policy, 51 FR 23410
(1986) which may be obtained from the Regional Office.
Reporting Under Section 15 of the CPSA
Section 15(b) of the CPSA defines responsibilities of 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 -
(1) fails to comply with a consumer product safety standard or
banning regulation established by the Commission or a voluntary consumer
product safety standard upon which the Commission has relied under
section 9 of the CPSA;
(2) contains a defect which could create a substantial product
hazard described in section 15(a)(2) of the CPSA; or
(3) creates an unreasonable risk of serious injury or death.
The Commission's interpretative regulation (16 C.F.R. part 1115, as
amended following the enactment of the Consumer Product Safety
Improvement Act of 1990) explains the company's obligations and those of
the Commission. A copy of the regulations is included with the LOA or
will be provided by the Regional Office upon request.
Reporting Products Involved in Lawsuits
In addition to the amendments to section 15 of the CPSA, a new section
37 reporting requirement has been added to the CPSA. This new section
requires manufacturers (including importers) of a consumer product to
report to the Commission if (1) a particular model of a consumer product
is the subject of at least three civil actions that have been filed in
Federal or State court, (2) each suit alleges the involvement of that
model in death or grievous bodily injury (as defined in section
37(e)(1)), and (3) at least three of the actions result in a final
settle- ment involving the manufacturer or in a judgment for the
plaintiff within any one of the two year periods specified in section
37(b). 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 section 37 reporting requirement
WHY REPORTING IS REQUIRED
The intent of Congress in enacting section 15(b) and section 37 of the
CPSA 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 under section 15 and
section 37 provisions 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 under section 15 of the CPSA, it
does not necessarily mean there is a substantial product hazard. Section
15 simply requires firms to report whenever a product (1) fails to
comply with a consumer product safety rule; (2) fails to comply with a
voluntary standard upon which the Commission has relied; (3) contains a
defect that could create a substantial product hazard; or (4) creates an
unreasonable risk of serious injury or death. Thus, a product need not
actually create a substantial product hazard to trigger the reporting
WHEN TO REPORT
It is the Commission's view that a firm should take that all important
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 of section 15 and section 37 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. Under ordinary circumstances,
five (5) days is the maximum reasonable time for that information to
reach the chief executive officer or other official assigned
responsibility for complying with the reporting requirements. Weekends
and holidays are not counted in that timetable.
The Commission will evaluate whether or when a firm should have
reported. This evaluation will be based, in part, on what a reasonable
person, acting under the circumstances, knows about the hazard posed by
the product. Thus, a firm shall be deemed to know what it would have
known if it had exercised due care ascertaining the accuracy of
complaints or other representation.
If the company is uncertain whether the information is reportable, the
firm may elect to spend a reasonable time investigating the matter, but
no evaluation should exceed ten (10) days unless the firm can
demonstrate that a longer timetable for the investigation is reasonable.
If a firm elects to conduct an investigation to decide whether it has
reportable information, the Commission will deem that, at the end of ten
(10) days, the firm has received and considered all information which
would have been available to it had a reasonable, expeditious, and
diligent investigation been undertaken.
PENALTIES FOR FAILURE TO REPORT
Failure to report in accordance with the above referenced requirement
is a prohibited act under section 19(a) of the CPSA which states: It
shall be unlawful for any person to - (4) fail to furnish information
required by section 15(b); (11) fail to furnish information required by
Any person who commits a prohibited act is subject to civil penalties
under section 20 of the CPSA, including fines up to $1.25 million for a
related series of violations, and criminal penalties under section 21 of
the CPSA, which includes fines up to $500,000 or imprisonment not more
than one year, or both. Chapter 1 of this Handbook provides additional
details regarding the penalties.
excerpted from the REGULATED PRODUCTS HANDBOOK
U.S. Consumer Product Safety Commission, Office of Compliance
February 1994 - 2nd Edition*
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