Expert Recall

By Mike Rozembajgier

US Transportation Secretary Ray LaHood recently announced that the Transportation Department will fine Toyota more than $16 million for failing to adhere to legal obligations associated with its recalls. While the fine sounds like petty cash to a manufacturer the size of Toyota, it comes with serious implications. Regulatory agencies are increasingly making examples of major manufacturers who fail to report incidents or don’t manage a recall effectively. Consumer complaints and recall compliance are no joke. Manufacturers would be well advised to consider the Toyota fine a serious warning.

I recently spoke with The New York Times about what the fine could mean for Toyota in the future. The government’s decision to pursue the maximum civil penalty in the case is a signal that federal authorities believe the carmaker deliberately concealed safety information that would have triggered a recall months before one was finally announced. This move on the part of government regulators will also help the cause of plaintiffs’ attorneys trying to develop class action lawsuits against Toyota.

Toyota has two weeks to contest the fine, which is the largest civil penalty ever levied against a car company. Should Toyota decide to fight the fine, it will surely face even greater scrutiny from federal lawmakers. By accepting the maximum fine, however, the automaker effectively admits guilt and adds support for class action certification.

This could also be a game-changer for consumers. Toyota’s traditional base of customer loyalty will probably erode if customers buy into the government’s conclusion that the automaker withheld information about the safety of its vehicles in order to avoid an expensive recall.

In the future, we can also expect to see increases in the maximum penalties that federal authorities, like the Transportation Department, can levy against manufacturers. The Consumer Product Safety Commission (CPSC) took this action not long ago under the CPSIA.

There is a new administration in Washington, and it is looking to make a statement. Consumer safety is a top priority, and it must be your top priority as a manufacturer. Now is the time to examine your consumer complaint monitoring policies and recall preparation.

Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.