Are toys and other children’s products carelessly constructed time bombs that could injure your kids at any time? It’s a question that sounds as if it’s been torn from the tabloid headlines, but it’s also one U.S. consumers may be forgiven for asking these days, given that fines for both shoddy production and recalls of children’s products are on the rise.
In the first half of 2001, the Consumer Product Safety Commission-the government agency that regulates consumer products-dished out three fines to makers of children’s products. That’s one less than the total number it handed out in all of 2000, a threshold that the CPSC expects to surpass this year, according to spokesperson Scott Wolfson. Product recalls also rose for the same period by nearly 100%. As of June 30, the agency had put out 126 recall notices for children’s products, two less than it issued in all of 2000. ‘We’re taking stronger action against [children's products] companies for failing to report injuries related to their products. And the instances where companies are not reporting seems to be increasing. We need to send a strong message to the industry that this will not be accepted,’ says Wolfson.
But whereas the CPSC views the increase in fines and recalls as warranted, a matter of keeping children safe, the toy industry sees only over-zealousness. At issue is the CPSC’s interpretation of when companies should report problems with their toys. Under the Consumer Product Safety Act, companies are required to notify the agency of a pattern of complaints or problems with their toys in a timely manner. But determining what is a problem is often a highly subjective process, says the Toy Industry Association’s legal counsel Richard Locker.
‘If you were to look at fines issued to toy companies over the last 30 years, you would see that there have been no traditional violations issued for toys and toy products,’ he says, referring to instances where parts of a toy or its function have clearly violated a mandatory law.
Indeed, Fisher-Price’s much publicized US$1.1-million fine-the only penalty the CPSC has handed down to a toyco so far this year-penalized the company for its failure to report consumer complaints about its line of Power Wheels ride-on vehicles, not for any problem with the toy itself. (The other two cases involved Federated Department Stores, which was fined for selling flammable infant sleepwear, and Dorel subsidiaries Cosco and Safety 1st, which were distributing defective infant furniture, strollers and car seat carriers.) The CPSC’s fine-the largest ever levied against a toyco-charged that Fisher-Price knew about safety hazards with the toy and failed to report them, including 1,800 cases where it overheated, 116 cases where it caught on fire, and 71 incidents where it failed to brake.
Though Fisher-Price, in conjunction with the agency, recalled 10 million Power Wheels vehicles in ’98, the CPSC says that FP knew of the incidents as far back as 1995, but decided not to tell the agency. And that, says the CPSC’s Wolfson, impeded the agency’s ability to do its job.
For its part, Fisher-Price adamantly denies the charges. As part of the terms of its settlement, the company was able to state publicly that it had not violated the agency’s reporting regulations. Fisher-Price contends that the problems with its Power Wheels line were not a result of any defect, but rather how consumers were using the vehicles, and therefore did not warrant reporting. In many instances where there were fires, FP’s own investigations determined that consumers had bypassed a fuse in the toy’s engine using a dime or a piece of foil in an effort to hotwire their vehicles, says Laurie Oravec, director of public relations at Fisher-Price.
All of the incidents with the toys that the CPSC cites, she maintains, were either a result of consumer misuse or are reports that cannot be verified. If that’s the case, then why did FP issue the recall in ’98 in order to replace the old Power Wheels’ fuses with a more tamper-resistant casing and install wire connectors that were less prone to overheating? Oravec says the company did so because it wanted to prevent further tampering with its product. As for the company’s decision to pay the US$1.1-million settlement, she says that FP wanted to avoid a lengthy legal battle with the agency.
In the opinion of TIA’s Locker, the Fisher-Price case illustrates how the CPSC’s over-eager enforcement is needlessly penalizing the industry. ‘We expect to be regulated. But the [agency] has to recognize that when they evaluate a product, they have to be reasonable about how the product is being used. You can’t take every extreme situation and make a federal case out of it. If you take a baby carriage mountain climbing and it breaks, you’d likely conclude that it’s not the product’s fault. That’s where most of these issues come up, at least with respect to reporting and civil penalties,’ says Locker.
The CPSC’s aggressive approach, he argues, is also apparent in the way it alerts the public to potential problems with toys. Typically, the agency issues recall notices for any problems it becomes aware of, regardless of the degree or the imminent danger that they pose. That shotgun approach, Locker insists, runs the risk of desensitizing consumers to alerts that are truly serious. ‘They’re not all `recalls,’ where the product is expected to be discontinued and returned for a replacement. Some things fall short of that. You have to have a different system in place that allows for different levels of action based on the severity of the problem.’
Ultimately, what Locker sees as the CPSC’s activist leanings is really a result of political partisanship, and he expects the agency’s philosophy will relax once president Bush’s nominee for the chair, Republican commissioner Mary Sheila Gall, is sworn in later this fall. ‘This will sound very simplistic to say, but there is an effort to identify the Democrats as the party of the consumer and the Republicans as the party of big business. The current chairman, Ann Brown, is a very political individual who was a key supporter of the Democratic Party. I think she became more involved in the process to try to cast the previous administration as a very pro-consumer administration. And the way you do that is to focus on increasing enforcement.’
Meanwhile, the current CPSC shows no signs of loosening its grip on the industry. Wolfson says the agency is committed to increasing fines for companies that it feels fail to report. Companies are often reluctant to report problems because they see it as potentially affecting their bottom line, he says, ‘but when it gets down to it, working with us proactively to make sure injuries and deaths don’t occur is usually more important to their bottom line than they perceive.’