We have talked in this space frequently about doing the “right thing” when it comes to safe and compliant promotional products. That means suppliers and distributors working collaboratively to responsibly source what end-user clients want – product promoting their brand that they can purchase with confidence.
We have also talked about what can happen when you don't do the right thing – the consumer health risks, the challenges of a recall, and the poor publicity that can ensue and potentially cause great damage to the brand. Then, there's always the risk that lawsuits and fines could simply put you out of business.
Take the announcement last week by the Consumer Product Safety Commission of a $3.5 Million civil penalty levied against phil&teds USA for knowingly failing to report to the CPSC, as required by federal law, a defect and an unreasonable risk of serious injury. Now, you may not have portable high chairs in your catalog, but your risk resulting from product failure of child-appealing products is something you need to be aware of.
Between September 2009 and October 2010, phil&teds USA received multiple reports of failure from their MeToo high chair, including two incidents where children’s fingertips were amputated. Despite these reports and two design changes to fix the problem, phil&teds USA failed to immediately report the defect, consumer incidents, or the design changes to the CPSC. When phil&teds USA finally reported the high chair to the CPSC in January 2011, the company then failed to disclose that the high chair posed an amputation hazard. It was recalled in August 2011, after phil&teds USA had imported and sold more than 13,000 chairs nationwide at a retail price of $40-$50 apiece.
So, what happens now to phil&teds USA, a manufacturer that produced a dangerous product, and then, according to the CPSC, knowingly chose to hide the risks? The CPSC waived all but $200,000 of the fine, because the company said in sworn statements that that was all they could afford without going out of business.
But, even more importantly from our perspective, in addition to agreeing to the civil penalty, phil&teds USA has agreed that the company will implement and maintain a compliance program to ensure compliance with the Consumer Product Safety Act (CPSA) and a related system of internal controls and procedures.
The compliance program requires written standards, policies and procedures to ensure that all information regarding the company’s compliance with the CPSA, including reports and complaints, is conveyed to the company’s responsible employees. According to the CPSA release, the compliance program also must address:
• confidential employee reporting of compliance concerns to a senior manager;
• effective communication of compliance policies and procedures, including training;
• senior management responsibility for, and board oversight of compliance; and
• requirements for record retention.
At the Quality Certification Alliance, it's just this kind of comprehensive compliance program that we expect suppliers to have to become certified. How about you, are you interested in learning more? Visit us at http://www.qcalliance.org/.
Jeff Jacobs has been an expert in building brands and brand stewardship for more than 30 years. He’s a staunch advocate of consumer product safety and has a deep passion and belief regarding the issues surrounding compliance and corporate social responsibility. He is the executive director of Quality Certification Alliance, the industry’s only non-profit dedicated to helping suppliers provide safe and compliant products. When he's not working, you can find him traveling the world with his lovely wife, working as a volunteer Guardian ad Litem, or sometimes even enjoying a cigar at his favorite local cigar shop. Follow Jeff on Twitter, or reach out to him at jeff@qcalliance.org.