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A defect could be the result of a manufacturing or production error, or it could result from the design of, or the materials used in, the product. A defect could also occur in a product's contents, construction, finish, packaging, warning, and/or instructions.

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A defect could be the result of a manufacturing or production error, or it could result from the design of, or the materials used in, the product. A defect could also occur in a product's contents, construction, finish, packaging, warning, and/or instructions.

Not all products that present a risk of injury are defective. A kitchen knife is one such example. The fact that the blade is sharp to allow the consumer to cut or slice food is the very reason why the product was created; the knife's cutting ability is certainly not a produce defect, even though some consumers may cut themselves while wielding the knife.

In determining whether a product's risk of injury is the type that could make the product defective, the Commission considers the following:

1. What is the utility of the product? What is it supposed to do?
2. What is the nature of the injury that the product might cause?
The kitchen knife is supposed to have a handle so you can use the knife safely; if the knife has no handle and you have to grip the cutting edge to use the knife, this would constitute a possible defect.
3. What is the need for the product? Could you possibly cut food without a knife?
4. What is the population exposed to the product and its risk of injury?
5. What is the Commission's experience with the product?
6. Finally, what other information sheds light on the product and its pattern of consumer use?

If the information available to the company does not reasonably support the conclusion that a defect exists, the firm need not report to the Commission. However, since a product may be defective even if it is designed, manufactured, and marketed exactly as intended, the company should report if it is in doubt as to whether a defect exists.

If the information obtained by the company supports a conclusion that the product has a defect, the company must then consider whether the defect is serious enough that it could create a substantial product hazard. Generally, a product presents a substantial number of units or if the possible injury is serious or is likely to occur. Because most companies seldom know the extent of public exposure or the severity of the injury when a product defect first comes to their attention, the company should report to the Commission even if they don't know whether a substantial product hazard exists.

Section 15 lists the statutory criteria for determining a substantial product hazard, including the pattern of defect, the volume of defective products distributed in commerce, and the severity of the risk to consumers. Any one of the following factors could indicate the existence of a substantial product hazard:

1. Pattern of defect. The defect may stem from the design, composition, content, construction, finish, packaging, warnings and/or instructions accompanying the product. Or, conditions may exist under which the defect presents itself.
2. Number of defective products distributed in commerce. A single defective product could be the basis for a substantial product hazard determination if an injury is likely or could be serious. By contrast, a few defective products posing no risk of serious injury and having little chance of causing even minor injury, ordinarily would not be considered to present a substantial product hazard.
3. Severity of risk. A risk is considered severe if the injury that might occur is serious or likely to occur. Likelihood of injury is determined by considering the number of injuries which have occurred, the intended or reasonably foreseeable use or misuse of the product, and the population group exposed to the product, (such as children, the elderly, and the handicapped).

A substantial product hazard may exist when a product does not comply with an applicable consumer product safety rule, provided this lack of compliance creates a substantial risk of injury to consumers.

A. Company Reports

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 valuate 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 representations.

A company should report to the Commission under section 15 within 24 hours of obtaining information which reasonably supports the conclusion that a product does not comply with a product safety rule or contains a defect which possibly could create a substantial risk of injury to the public. The company may report a substantial product hazard to the Commission even while its own product investigation is continuing.

If the company is uncertain as to whether the information is reportable, the firm may elect to spend a reasonable time investigating the matter, but no evaluation should exceed then (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.

B. Information To Be Reported

A company calling the Commission (301- 504-0608) to report a potentially defective product should be prepared to provide some general and background information; however, no company should delay its report because some of the vital information has not been complied. The following information should be transmitted to the Commission by telephone:

a. Description of the product.
b. Name and address of your company, whether you are a manufacturer, distributor, importer or retailer.
c. Nature and extent of the possible product defect.
d. Nature and extent of injury associated with the product.
e. Name, address and telephone number of the person informing the Commission
f. To the extent such information is reasonably available, the data specified in Section 1115.13(d) of the Commission's regulations interpreting the reporting requirements.

C. Retailer and Distributor Reporting

Retailers and distributors may satisfy their reporting obligations under section 15 either by telephone (301-504-0608) or by writing the Division of Corrective Actions, Directorate for Compliance, U.S. Consumer Product Safety Commission, Washington, D.C. 20207. Alternatively, the retailer or distributor may transmit a letter to the manufacturer or importer describing the defective or non-complying product and forward a copy of that letter to the Division of Corrective Actions at the address listed above. Retailers and distributors also must report information received from another firm about a defective or non-complying product handled by the retailer or distributor. Similarly, a distributor or retailer receiving product hazard information from a manufacturer or importer should report to the Commission unless the manufacturer/importer advises that the CPSC has already been notified.
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from the CORRECTIVE ACTION HANDBOOK
U.S. Consumer Product Safety Commission
October 1988

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