Expert Recall

By Mike Rozembajgier

In addition to critical public scrutiny, class action lawsuits, congressional hearings, and Securities and Exchange Commission (SEC) investigations, Toyota and its executives now face the very real possibility of federal fines and indictments. Just another example of the risks a company can face today for failing to adequately address consumer safety issues and effectively manage a product recall. Recall management and regulatory compliance are the responsibility of risk managers and executives.

A major recall will impact all areas of a company – from marketing and communications to investor relations and, ultimately, the bottom line. Any regulatory body – the FDA, FSIS, CPSC and USDA – might take legal action against you.

Keep in mind: even an effectively managed recall still has the potential to attract negative public scrutiny and damage your brand. But there are a number of things you can do to mitigate the risk that your recall will result in criminal investigations, congressional hearings, indictments, or fines.

1. Make consumer safety your #1 priority – and mean it. Consumer safety is a number one concern for lawmakers and government agencies. Your company should follow suit. By failing to make consumer safety your top priority, you risk increased scrutiny by lawmakers, regulators, and the plaintiff’s bar. Understand that these individuals are working to protect people. By failing to do the same, you invite them to go after you.
2. Identify in a timely fashion any issues that may jeopardize consumer safety. That means monitoring any and all resources for trends in consumer complaints and credible reports of possible safety issues. Once identified, it is critical you appropriately address these issues – which likely includes informing regulatory agencies and undertaking a recall. Be sure to work with the regulatory agency to fully understand the problem and the quantity of products affected. Identifying the wrong problem or inaccurately gauging the scope of the recall can make the problem a lot worse than it otherwise needs to be.
3. Work with regulatory agencies. In our global economy, working with regulatory agencies can be difficult. Regulations don’t span borders. A product in violation of standards in one country may be in compliance in another. But that doesn’t mean you shouldn’t recall a questionable product in both countries. Be sure to understand the risks facing consumers and the importance of complying with international regulations. Failing to adhere to standards of reporting risk and executing recalls could result in congressional hearings and federal investigations.
4. Be honest about the problem – not only with regulators, but also with customers. Transparency is critical when communicating with consumers and retailers. Likewise, it is important to identify the right problem. If your initial efforts do not solve the underlying problem that led to a recall, you can count on lawmakers, lawyers and government agencies to get involved.
5. Communicate effectively, communicate often. During a recall, it is critical to communicate with all affected parties, including regulatory agencies, consumers, employees, investors and retailers. Regardless of the audience, it is critical that they receive new information as soon as it is available. Answer questions. Be responsive. It is how your company handles these challenges that will determine the full impact of the recall – on both public safety and your bottom line.

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.