June 2, 2010

Notification issues in CPSC consumer product recalls

This was a recent article on CPSC recalls that I was interviewed for. Given the last few recalls I have done with the CPSC it seems that the CPSC is overwhelmed with recalls right now mostly related to companies worried about lead content problems under the new law.

Reprinted with Permission of Bicycle Retailer and Industry News

Campaign: Shortfalls in Recall Process


SAN JOSE, CA—Eighteen months after recalling 40,000 Keo pedals in the U.S., Look Cycle USA feels too many cyclists are still riding the potentially faulty product. In response, it’s hatching a second dealer-focused effort to repair or upgrade the remaining pedals.

“We noticed a lot of our dealers have forgotten or didn’t take it seriously because there have been some people who have experienced failures who have taken [their bike] to the shop numerous times since then, and some of those were our dealers that we’ve sent the notification to and they didn’t inform the customer,” said Chas Belden, operations and supply chain manager for Look Cycle USA.

The French company voluntarily recalled the road pedals in August 2008 due to a steel axle inside the pedal that could break. At that time, it followed Consumer Product Safety Commission recall protocol including sending notices to dealers, issuing a joint press release through the CPSC, posting a notice on its Web site and providing a free fix for the axle. Look also sent regular audit reports to the CPSC with updates on its progress.

Six months later, satisfied with the process, the CPSC closed the recall.

But since then, Look has received 10 to 15 reports of pedals breaking and Thierry Fournier, Look’s chief executive officer in France, estimates only about 35 percent of the pedals in the U.S. were returned.

In April, Look sent letters to its dealer base along with a POP countertop display explaining how to identify the affected classic, spring and carbon pedals. It also ran an ad in Bicycling to reach out to consumers.

“Look is probably the strongest pedal brand in the market and that means a lot to us. We want our customers to be 100 percent satisfied,” Belden said. Not only is the brand’s image at stake if the pedals stay on the market, but there are liability concerns as well, both from the manufacturer and retail side.

Product liability attorney Steven W. Hansen said Look’s low response rate is not uncommon in the industry; he estimates that most recalls get no more than a 30 to 60 percent return rate. Recall effectiveness is particularly a problem after the CPSC has deemed the recall satisfied due to the high number of recalls in recent years, as well as the volume of service jobs moving through shops.
“I’ve got a bad feeling that with most bikes that come in for generic tune-ups or repairs, there’s not much thought given to recalls, especially those issued more than six months ago,” Hansen said.

That’s a problem if a consumer gets injured on a recalled product and names the retailer in a lawsuit. If the attorney can prove the retailer knew about the recall before the injury and saw the customer’s bike but didn’t fix the problem, the shop could be liable.

Darin Kendall, part owner of the five-store Bingham Cyclery chain in Utah, knows what it’s like to be on the losing side of a product liability case. Over 45 years in business, his insurance company has had to pay out on an injury case more than once despite the fact that the shop followed the manufacturer’s instructions.

With computers, it’s gotten easier to notify customers of a recall, but staying current on recalls at all five shops—especially those from brands the shop doesn’t carry—remains one of the most difficult and time consuming parts of Kendall’s job.

“It’s so maddening. It’s not making me money; it’s losing me money. It’s something you have to do because if you don’t it’s going to come back and bite you,” Kendall said.

Kendall said he follows through on instructions given to him by a manufacturer for every recall done through the CPSC, and has his staff watch for product coming through the doors that were part of larger, more significant recalls. He’s still swapping out cranksets that were part of a Shimano recall more than a decade ago.

Industry-wide, he suspects many recalls go by the wayside because of high turnover rate of mechanics and low wages paid in service shops.

“Most of the mechanics out there couldn’t spot a single one of those recalls. Stuff sneaks through the cracks all the time. It is scary,” he said.

Hiring experienced mechanics has helped Adams Avenue Bicycles in San Diego stay on top of recalls and other product defects, said Greg Burchell, service department manager.

Often, his mechanics end up notifying a manufacturer about a failure they’ve seen consistently while working on bikes, but that hasn’t yet been recalled, he said.

“A lot of times if someone has been doing it a year to two years, they’re probably not going to catch that,” Burchell said, adding that staying in good communication with suppliers also helps when dealing with recalls.

Look’s Belden hopes the brand’s retailers can use the renewed blitz to their benefit.

“Our dealers have a lot of long-term customers, but it helps bring new people into their shop as well. We have on our Web site something that says, ‘For your axle upgrade, go to this dealer.’ It drives people into the shop that may not go in there otherwise,” Belden said.

Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2008 Conditions of Use