sec. 15 reporting requirements, corrective action plans, and investigations

ICPHSO Midwest Regional Product Safety Training

Workshop

Sec. 15 Reporting Requirements,

Corrective Action Plans, andInvestigations

Blake Rose, Lead Compliance OfficerViews expressed in this presentation are those of the staff and do not necessarily represent the views of the Commission.

Office of Compliance

• Regulatory Enforcement Division • Defect Investigations Division - Fast Track Team - Children’s Hazards Team - Electrical, Fire and Mechanical Hazards Team

2

Agenda

• Section 15 Reporting Obligations

• Online Reporting

• Conducting a Recall

• Staff Determinations

• Staff-Initiated Investigations

3

Reporting Requirements

4

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, or

5

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; Refrigerator Safety Act; or

6

Reporting Requirements

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

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

7

How quickly must I report?

* Firm must report “immediately” once information “reasonably supports the conclusion” that a safety issue exists.* “Immediately” means within 24 hours, but firms may conduct “reasonably expeditious” investigation.* Investigations should not usually exceed ten working days. 8

Reporting Do’s and Don’ts

* Don’t assume that an incident without injury means there’s no problem.

* Do evaluate product failures to determine what could have occurred in worst case.

* Don’t wait to finish exhaustive investigation before telling CPSC .

9

FAQ

What can happen if I don’t report?

10

Civil Penalties !

11

Up to $100,000 per violation, maximum$15.15 million for related series of violations.

Agenda

• Section 15 Reporting Obligations

• Online Reporting

• Conducting a Recall

• Staff Determinations

• Staff-Initiated Investigations

12

Filing an Initial Report Online

13

Fig. 1

Online Reporting

14

Online Reporting

15

Online Reporting

16

Online Reporting

17

FAQ

Can I send an initial report by email?

Section15@cpsc.gov Can I send an initial report by

fax or mail? Yes, but …

18

Decision Point

Do Fast Track Recall: There’s a problem with my product, and I want to take corrective action by doing a full recall with the CPSC;

OR Proceed with Staff

Determination: Because I don’t think this issue requires corrective action; I’m only willing to take limited action; or I’m unsure what to do. 19

Agenda

• Section 15 Reporting Obligations

• Online Reporting

• Conducting a Recall

• Staff Determinations

• Staff-Initiated Investigations

20

Objectives of a Recall To locate all defective products as

quickly as possible; To remove or correct defective

products in the distribution chain and in the possession of consumers, and

To communicate accurate and understandable information in a timely manner to the public about the product defect, the hazard, and the corrective action. 21

What is a Fast Track Recall?

Requirements:Firm must initiate an acceptable consumer-level recall within 20 working days of report.Advantages:• Avoids written staff preliminary

determination of defect and hazard with your product;

• Reduces technical analysis (focus on notification and remedy);

• Consumers get notice more quickly.22

Elements of a Recall

Stop production, distribution and retail sales;

Submit a Full Report and product samples;

Submit a proposed Corrective Action Plan (CAP) with remedy (refund/repair/replace);

Public notice (consumer letters, website notice, retail posters, press release, social media);

Monitoring of recall results.

23

FAQ

Can I be removed from the Fast Track Program?

24

What is a Corrective Action Plan (CAP)?

A detailed written proposal that spells out the steps the recalling firm will take to capture and correct defective products in the distribution chain, and in the hands of consumers.

25

Coordination with RetailersA Recall

*Early notification ;*Lock out sales at register and online;*Isolate stock;*Post notices on website;*Display Recall Posters;*Identify consumer purchasers through credit card sales, extended warranty sales, etc.

Choosing a Remedy

Options:RefundReplaceRepair

27

Refund

Fastest and easiest for consumers;

Should be for full purchase price;

Recalled product needs to be returned to retailer or shipped back to recalling firm at no cost to consumers.

28

Replacement

Must be a comparable product; Staff will need to assess sample

of proposed replacement, review test reports on product, and check for any incidents involving replacement product;

Recalled product needs to be returned to retailer or shipped back to recalling firm at no cost to consumers. 29

Repair

Repair programs always need staff review;

Can be done by consumer, technician at home or local service facility, or pre-paid return to recalling firm;

If done by consumer, must be easy with clear instructions;

If tools are required, should be supplied by recalling firm. 30

Consumer Notification

Goal: To reach as many of the owners of the recalled products as possible, and provide incentive for them to stop using and correct the recalled product.

31

Direct Notice is Best!

Email, letter or phone call to known purchasers of recalled product.

* Online/phone purchases* Product/warranty

registration* Replacement part/accessory

purchases* Service requests* Extended warranty

customers* Loyalty programs

32

Retail Posters Should be brief, eye-catching, and

describe the product, the hazard, and what consumers need to do;

Include the terms “safety” and “recall” in the heading;

Use a color photo of the product; Should be posted in several

conspicuous locations in the store for a minimum of 120 days.

33

34

Toll-Free Recall Number

Have sufficient incoming lines to handle call volume;

Have live customer service representative access during core business hours;

Avoid extensive phone menus; Staff will want to review script

being used by customer service reps.

35

Website

Clear, concise recall information easily located on home page or link from home page;

Online registration for recall;

Sufficient bandwidth to handle traffic.

36

37

Public Notice Press Release: joint notice with

wide distribution using a standard format.

Recall Alert: similar in wording to a press release, but with limited distribution. Firm must be able to contact all consumers directly, and must submit a list of those consumers.

Video News Release: a video version of the written press release for use by the media.

38

Public Notice

Social Media: Twitter, Facebook, blogs, You Tube. CPSC Office of Communication may use Twitter and blogs in conjunction with a press release. Firms are expected to announce recalls on their media platforms.

39

40

41

Surviving the Public Notice Process

Know that: This is a negotiation between the

firm, CPSC Compliance Officer, and CPSC Office of Communication;

Office of Communication strives to issue fair, accurate and informative communications which are easy for consumers to understand and are presented in a consistent manner;

42

Submit a draft press release in Microsoft Word format using our standard captions. Recalls involving deaths will be in a narrative format. AP Stylebook is used as a guide. Don’t expect exceptions!

“Clearance” versions of the press release from the Office of Communication must still go through the agency approval process. On occasion, this may result in last-minute changes or a delay in the release date.

43

Other Measures

Paid Advertisements* Specialty publications* National publications

Consumer Incentives* Gift cards* Store credit* Free or reduced-price

accessories

44

Reverse Logistics

Reverse distribution or product return:

How you get the product back from the distribution channel.

The goal is to avoid having recalled products put back

into commerce.

45

Need to know where your recalled products are at all times;

Need to ensure that third-party contractors and retailers are following the disposition program;

It is illegal to sell recalled products! 46

Recall Monitoring

Recalling firm must submit Monthly Progress Reports which track:

* Number of products corrected;* Reports of pre- and post-recall

incidents;* Notification methods used.

47

CPSC Staff Recall Monitoring

Field staff conducts Recall Verification Inspections at recalling firm;

Field staff and/or state investigators conduct Recall Checks at point of sale;

Internet Surveillance Unit checks for online sales of recalled products;

Compliance staff monitors correction results and new incidents to assess effectiveness

48

FAQ

What happens if I report but I don’t choose to do a Fast Track Recall?

49

Agenda

• Section 15 Reporting Obligations

• Online Reporting

• Conducting a Recall

• Staff Determinations

• Staff-Initiated Investigations

50

Staff Determinations

Staff investigates whether the product contains a defect, and whether that defect presents a risk of injury that rises to the level of a substantial product hazard.

51

What is a defect?

A flaw, fault, or irregularity that causes weakness, failure, or inadequacy in the form or function of a product.

52

Defects can stem from: Manufacturing Production/assembly Design Materials used Construction Finish Packaging Warnings Instructions Failure to operate as intended

53

Substantial Product Hazard (SPH)

(1) A failure to comply with an applicable consumer product safety rule which creates a substantial risk of injury to the public, or

(2) A product defect which creates a substantial risk of injury to the public.

54

Factors to Consider

Pattern of defect Number of defective products

distributed in commerce Severity of risk Likelihood of injury

55

Staff Assessment Tools

Incident analysis; Staff technical evaluation of defect

and risk by electrical, mechanical, chemical and fire science engineers, health scientists, and industrial psychologists;

Legal guidance from staff attorneys.

56

Preliminary Determination (PD)

Staff’s finding on defect and substantial product hazard;

Decision reached by panel including the compliance officer, engineers, compliance attorney and Compliance management;

Firm is notified in writing of the decision. May result in a request for corrective action (recall).

57

Agenda

• Section 15 Reporting Obligations

• Online Reporting

• Conducting a Recall

• Staff Determinations

• Staff-Initiated Investigations

58

Staff-Initiated Investigation

An investigation launched by Compliance staff as a result of information it receives suggesting a possible product defect that could lead to a risk of injury.

59

Sources Consumer incident reports; In-depth investigations by field staff; News reports; Notice from fire officials; Website product reviews and complaints; Trade complaints; Congressional inquiries; Medical examiner reports and death

certificates; Hospital reports.

60

Process

As with the staff determination, investigation includes technical analysis of defect and hazard. Full Report may or may not be requested from firm.

If staff evaluation finds a defect and significant risk of injury, firm will be requested to take corrective action (recall).

61

Civil Penalties !

62

Up to $100,000 per violation, maximum$15.15 million for related series of violations.

Industry Guidance:www.cpsc.gov

63

Business & Manufacturing

RecallGuidance

Topics include: Recall Handbook, Fast Track Recalls, Recall Planning, How to Conduct a Recall, Recall Effectiveness.

64

The U.S. Consumer Product Safety Commission

is charged with protecting the public from

unreasonable risks of serious injury and death

from over 15,000 types of products used by

consumers.

65

Contacts Tanya Topka, Team Lead, Fast Track Team (301) 504-7594, ttopka@cpsc.gov Blake Rose, Team Lead, Electrical, Fire and

Mechanical Hazard Team (301) 504-7613, brose@cpsc.gov Renae Rauchschwalbe, Team Lead,

Children’s Hazards Team (301) 504-7664, rrauchschwalbe@cpsc.gov Scott Simmons, Director, Defect

Investigations Division (301) 504-7574, ssimmons@cpsc.gov

66