Consumer Product Safety Act

WHAT RESPONSIBILITY does a company have to inform existing and potential consumers of unsafe products? The Consumer Product Safety Act was enacted in 1972 as a response to perceptions that product liability laws did not sufficiently protect consumers from unsafe products. To implement the act, the Consumer Product Safety Commission was created. The Commission was made responsible for administering additional consumer protection laws, including the Federal Hazardous Substances Act and the Flammable Fabrics Act.

The commission has a broad jurisdiction over items specifically designated consumer products, which are defined as “any article or part produced for sale to a consumer for use in a household, in a school, or in recreation.” All consumer products are subject to the act's mandatory, minimum reporting requirements. Penalties for failing to comply with the act are in place, and include up to $5,000 per product. Companies may also be subject to criminal penalties if they knowingly commit violations. The act requires that manufacturers, distributors, importers, and retailers immediately inform the commission if any product fails to comply with safety standards, contains a defect that could create a hazard, or creates unreasonable risk of serious injuries or death. If a product is the subject of at least three civil suits within a two-year period, companies are required to file a report with the commission. To protect consumers and avoid penalties, manufacturers must develop policies that enable them to comply with the act.

Estimates in the early 2000s indicated approximately 20 million Americans have suffered injuries from the use of unsafe products. Additionally, of the 20 million victims, 110,000 have been permanently disabled due to unsafe products, while another 30,000 have died. Many researchers studying white-collar or corporate crime have focused their interests on unsafe products in different types of industries. The existing research efforts have provided students in criminology and other fields with a great deal of information on unsafe products and related crimes against consumers.

The potential for unsafe products exists in all industries, although some have received more publicity than others. The automobile industry, particularly Ford Motor Company and General Motors, has been connected to many cases of unsafe products resulting in gross injuries and deaths of consumers. Criminologists have studied the famous Ford Pinto cases of the 1970s, in which the fuel systems burst in read-end collisions. Investigations revealed that Ford was aware of the potential problem during their pre-production stage of the Pinto. Ford estimated that it would cost only $11 per automobile to fix the problem.

The company's cost-benefit analysis determined that Ford could save $87.5 million if they kept manufacturing cars that were expected to injure or kill consumers. Ford's rational estimates later proved to be unreliable, as more crashes than they anticipated actually occurred, and many classaction lawsuits against the automaker were initiated. Judgments against Ford repeatedly took place, including a 1978 jury award of $127.8 million to one teenage victim. Following this particular decision,[Page 200] the Department of Transportation announced a recall of the Pintos.