Monday January 09, 2023
Peloton to Pay $19M+ to Settle Reporting and Post-Recall Sales Allegations
Peloton will pay $19.065 million to settle two CPSC allegations involving Tread+ treadmills – reporting incidents late and selling 38 units after recalling. On reporting, CPSC asserted that the company knew of incidents beginning in December 2018 and that – by the time it reported in March 2021 – it knew of more than 150, including a child's death and 13 injuries.
The settlement agreement (bit.ly/3ZpBUlk) also noted CPSC's initial unilateral warning (PSL, 4/26/21). The company agreed to a recall soon after (PSL, 5/10/21).
Commissioners approved the settlement 4-0, but Commissioner Peter Feldman reiterated past concerns about having a "coherent enforcement policy," writing (bit.ly/3WTWHM3):
"Here, a maximum civil penalty was appropriate to resolve the failure-to-report claims given the number of products distributed in commerce and the fact that this matter involved the death of a six-year-old child, and other injuries…Yet, in another recent failure-to-report case that involved fatalities, a similar number of incidents, and evidence of aggravating factors, this current Commission settled claims against Vornado Air, LLC for as little as $7.5 million. That settlement, which I opposed, arguably involved worse facts than Peloton given Vornado's status as a repeat offender."
Other commissioners' comments included:
Incidents involved people, animals, and objects being pulled under the rear of the belt. Injuries included abrasions, broken bones, friction burns, and lacerations. Later in 2021(PSL, 9/6/21), Peloton acknowledged in an SEC filing that CPSC was investigating the situation.