Safety Academy

Reporting Requirements, Regulatory Violations,

Investigations and Recalls

September 18, 2013

Views expressed in this presentation are those of the staff, and do not necessarily represent the views of the Commission

Reporting Requirements

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Section 15(b) of the Consumer Product Safety Act establishes reporting requirements for manufacturers, importers, distributors and retailers of consumer products, over which the Commission has jurisdiction.

Each must notify the Commission immediately if it obtains information which reasonably supports the conclusion that a product distributed in commerce:

Reporting Requirements

(1) fails to comply with an applicable consumer product safety rule or with a voluntary consumer product safety standard upon which the Commission has relied under section 9, or

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Reporting Requirements (2) fails to comply with any other

rule, regulation, standard or ban under the CPSA or any other Act enforced by the Commission, including the:

Flammable Fabrics Act, Federal Hazardous Substances Act, Children’s Gasoline Burn Prevention Act,

Virginia Graeme Baker Pool and Spa Safety Act,

Poison Prevention Packaging Act, and

Refrigerator Safety Act; or

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Reporting Requirements

(3) contains a defect which could create a substantial product hazard, or

(4) creates an unreasonable risk of serious injury or death.

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CPSC Office of Compliance

Three divisions: Field Operations, Regulatory Enforcement and Defect Investigations

Regulated Products Enforcement Division: Enforces CPSC’s regulations and

standards Conducts investigations Initiates and negotiates

corrective actions Provides advice and guidance to

industry

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Compliance Overview

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Compliant-No Action

Violations-Corrective

ActionReceive

LOA from CPSC

Stop-sale, remove product from

market, recondition/correc

t,order destruction, correct, RECALL

Possible Penalties

CPSC Jurisdictional Authority

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Violations/Prohibited Acts

The Statutes make it unlawful to:

• manufacture for sale, sell, offer for sale, distribute or import any product that does not comply with a mandatory standard or ban under any act the Commission enforces;

• fail to report information as required by section 15(b) (CPSA);

• fail to certify; and

• fail to include tracking labels when appropriate.

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Top Regulated Product Safety Concerns

Products that fail to comply with a mandatory safety standard or ban under the Acts

Products that fail to have certification and applicable GCC or CPC

Products that fail to have tracking labels, when appropriate; 10

Imports• Under section 17(a), a consumer product

must be refused admission to the United States if it:

– fails to comply with an applicable consumer product safety rule (CPSA standard or ban)

– is not accompanied by a required certificate or tracking label or is accompanied by a false certificate

– is or has been determined to be imminently hazardous in a section 12 proceeding

– has a defect that constitutes a substantial product hazard

– was imported by a person not in compliance with inspection and recordkeeping requirements.

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FY 2013 – Enforcement Actions

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All Regulated LOA’s, FY08-FY13

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Recalls by Product Origin

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Flammable Fabrics Act

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1.Wearing Apparel

2.Vinyl Plastic Film

3.Children’s Sleepwear

4.Carpets and Rugs

5.Mattresses, mattress pads

6.Mattresses, mattress pads

16 CFR Part and Title

1. 1610

2. 1611

3. 1615/1615

4. 1630/1631

5. 1632: Cigarette Ignition

6. 1633: Open Flame Ignition

CPSIA Requirements• Consumer Product Safety Improvement Act

of 2008 (CPSIA)—imposes new requirements for consumer products, non-children’s and children’s.

• Non-children’s: A General Certification of Conformity (GCC) is required for all products subject to a rule, ban, standard, or regulation under and enforced by the CPSC

– GCC shows conformance to applicable requirements (e.g., flammability)

– manufacturer or importer must issue a certificate to indicate that the product complies and why a test has not been conducted.

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CPSIA Requirements-Children’s

Children’s products: Many of the new requirements are specifically for children’s products.

Children’s products are products designed and intended primarily for children 12 years or younger.

Additional requirements for child care articles, items that are used for feeding/sleeping for children 3 years or younger. 17

CPSIA Requirements-Children’s

• Third party testing: Certification based on testing performed by an accredited third party laboratory recognized by the CPSC

• Children’s Product Certificate (CPC) required– CPC shows conformance to applicable

requirements (e.g., flammability, lead, phthalates), based on third party testing

• Lead content and surface coating limits must be met for certain components of textile products.

– For example, buttons, snaps, grommets, zippers, heat transfers, and screen prints

• Tracking labels required

• Child care articles (sleepwear, mattress for children 3 and under) subject to phthalates requirements

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CPSIA Home Page

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Searchable List of Laboratories

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Reporting Under Section 15We encourage reporting under Section 15:

On our website at: www.cpsc.gov

On right-hand side under “Businesses”

Or via e-mail to: Section15@cpsc.gov

Faster, easier to track and route

Add photos and other documents

We discourage reporting via phone, mailed letter, or fax. Much slower, harder to track, and

much easier to get lost or duplicated during routing

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What to Provide When Reporting Under Section

15Initial Report Details about product, stop sale

date, potential defect and hazard, samples, and all available information

Full Report All information (1-15), customer

list, CAP, notice documents, draft press release, test reports, list of foreign countries sold to, reverse logistics/disposal plan

FY12 Recall Case Breakdown

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51%

30%

19%

Compliance-Initiated Investigations: Examples of

Data Sources Consumer incident reports, news reports, fire officials, trade complaints, Congressional complaints, medical examiner reports, death certificates injury reports through NEISS –

National Electronic Injury Surveillance System – a stratified probability sample of 101 hospitals

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Preliminary Investigations

In-Depth Investigations (IDI) – Field Investigator is assigned for on-site investigation of a consumer incident

Product Samples – an incident unit or exemplar unit may be obtained. Compliance works with CPSC technical staff to evaluate defect and likelihood of injury.

Firms may be requested to submit a Full Report

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Staff Preliminary Determinations

After investigation is complete, staff from Compliance, Engineering, and Compliance Legal meet with Compliance management to discuss the product defect and risk of injury.

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Recalls involving Compliance-initiated investigations are 4 times more likely to have reporting violations than firm-reported recalls. Such cases are referred to the Office of General Counsel for civil penalty review.

Civil penalties: up to $100,000 per violation, maximum $15.15 million for related series of violations. 29

What is the Fast Track Program?

Initiated in 1997, it eliminates “preliminary determination” of hazard for cases reported by a firm that can quickly implement a recall.

WIN-WIN-WIN • Firm no PD and can implement

a recall quickly

• Staff expends fewer resources

• Public gets quicker notice

What is the Fast Track Program?

Firm must

• do public notice and initiate a stop sale quickly.

• Must implement an acceptable Corrective Action Plan within 20 business days.

Firm can do repair, replacement, or refund as corrective action.

• Staff should get opportunity to review repair or replacement before implementing.

Firm must still provide a full report and all requested information for a Fast Track recall.

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Conducting a Recall: Ways to Reach Public

Hotline (toll-free)

Posters at traditional retail locations (several locations)

Forums, trade associations, magazines for industry, brochures, and catalogs

Direct Notice is BEST (e-mail, letter, phone calls)• Review all internal customer

lists (loyalty cards, warranty, catalogues)

Website (initiate online registration, instructions)

Social media (Twitter, Facebook, Google+, Blogs)• Firms expected to announce

recalls on their social media platforms• CPSC is routinely using Twitter

YouTube (recall message, how-to repair, step-by-step instructions, how to assemble)

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Conducting a Recall: Ways to Reach Public

Choosing a Remedy Refund/Replacement/Repair

Refund is the fastest and easiest method for consumers.• Must consider if product will be

returned and how.• Removal of piece can disable

product and be returned at lower costs.• Pre-paid postage return for

consumers.

Replacement must be a comparable product.• Requires review of test

reports/data by staff. Repair programs always need staff

review.• Can be done by consumer,

technician, or return to firm.• If done by consumer, must be

easy with clear instructions.

• If tools required, should provide them.

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Choosing a Remedy Refund/Replacement/Repair

Conducting a Recall Press Releases

• Recalls announced in press releases due to lack of direct notice and need for outreach.

• Can be pitched to media, can be highlighted on CPSC’s main page, tweet

Conducting a Recall Recall Alerts• Very small percentage of recalls

• Requires direct contact for virtually all consumers, retailers, and distributors

• Still posted on CPSC website

• Must provide a customer list to qualify for a Recall Alert

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Conducting a RecallHow to Speed Up the Recall

Process Report electronically online or via

Section 15 mailbox.

Provide all required and requested information; don’t make us ask for each missing item.

Provide Full Report electronically in numbered format (1-15), not in a narrative.

Provide samples, test reports, and engineering documents for repair or replacement programs early in process for staff review.

Conducting a RecallHow to Speed Up the Recall

Process Make sure we get press release

in Word format.

Provide high-quality jpg photos of product.

Respond promptly to technical questions.

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Recall Monitoring: Reverse Logistics

Reverse of distribution or product return• How you get product back from

distribution Reverse logistics plan should

outline details such as how to: • quarantine the product • get the product returned • remove product from shelves• repair, replace, or dispose of

product Provide your reverse logistics plan

to Compliance staff with your corrective action plan (CAP) and full report.

Important process to plan and avoid having recalled products put back into distribution

Illegal to sell recalled products

Track, Track, Track

• We need to know where your products are going at all times.

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Recall Monitoring: Reverse Logistics

Recall Monitoring CPSC staff monitors all

recalls.

You must provide monthly progress reports via fax or e-mail until the case is closed by staff.

Use the progress report form provided with CAP letter.

• Report incidents pre- and post-recall.

Recall Monitoring We will check on

implementation of the CAP through on-site recall checks with the recalling company, retailers, and consumers.

Notify Compliance of any changes at the firm or to the CAP.

• New POC, new address or phone, hotline hours, bankruptcy or purchase

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Recall Monitoring: Ineffective Recalls

Notify Compliance if CAP appears not to have been effective.

Compliance staff may seek additional notification for post recall incidents, ineffective notification, low correction rates.

• Re-announcement of recall

• Additional forms of notification

• Out-of-season recall group notification

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Recall Monitoring: Disposal Know if you will need special disposal

for items like batteries or electronics (federal, state, or local laws).

If retailers will be disposing or destroying the product or if you are using a third party, we need to know.

Before you destroy, dispose, or recycle recalled products, notify CPSC staff via e-mail to recallproductdisposal@cpsc.gov .

Field staff may witness destruction/ disposal/ recycling or require an affidavit to verify process.

Notify us of plan as early as possible to coordinate field staff.

Recall Monitoring Request to Compliance staff to

close the formal monitoring of recall case

Provide monthly progress forms until you receive a close letter from Compliance.

Continue to honor recall requests for remedy.

Continue to post recall notification on firm’s website after formal monitoring ends.

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For Further Information:

47www.cpsc.gov

Ray AragonDirector,

Office of Compliance and Field Operations

301-504-7578raragon@cpsc.gov

Blake RoseLead Compliance

Officer,Defect

Investigations Division

301-504-7613brose@cpsc.gov

Mary ToroDirector,

Regulatory Enforcement

Division301-504-7586

mtoro@cpsc.gov

U.S. Consumer Product Safety Commission

4330 East-West HighwayBethesda, MD USA 20814-

4408

CPSC Stands for Safety