Haier America Trading LLC (New York City) agreed to pay a civil penalty of $587,500 to settle allegations that it failed to inform the U.S. Consumer Product Safety Commission (CPSC) about a defect and fire hazard in the company's Oscillating Tower Fan, model FTM140GG.
The penalty settlement has been provisionally accepted by the CPSC and resolves CPSC allegations that Haier America knowingly failed to report to CPSC immediately, as required by federal law, that the fan posed a risk of fire. The CPSC said repeated bending of fan wires during oscillation caused the wires to break, resulting in a fire hazard.
From May 2004 to October 2004 Haier America received as many as 14 reports of incidents involving the fans, including some fires and one report of injuries. During that time, Haier America conducted testing and other analysis and reported to CPSC in December 2004. The December 2004 report came after the CPSC asked the company to report. In November 2005, Haier America and CPSC announced a recall of the fans:
U.S. federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect that could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or violates any consumer product safety rule or any other rule, regulation, standard, or ban enforced by the CPSC.
In agreeing to the settlement, Haier America denies CPSC's allegations.
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