WASHINGTON (BRAIN) — The Consumer Product Safety Commission and Peloton Interactive have agreed to a $19 million civil penalty settlement over CPSC's charges that Peloton failed to report a defective treadmill that created a risk of serious injury to consumers.
The CPSC said by the time Peloton filed a report with the Commission there were more than 150 reports of people, pets, and/or objects being pulled under the rear of the Tread+ treadmill, including the death of a child. And the CPSC said that, after Peloton and the Commission jointly announced a recall of the treadmill in 2021, Peloton knowingly distributed 38 of the recalled treadmills using Peloton personnel and through third-party delivery firms.
"This settlement demonstrates CPSC's commitment to hold companies accountable when they put the public at risk and consumers should look forward to a safer marketplace for all. I thank CPSC's staff who worked to identify and address the product hazard and advance this settlement on behalf of consumers," said Alexander Hoehn-Saric, the CPSC's chair.
In addition to the $19,065,000 civil penalty, the settlement requires Peloton to maintain an enhanced compliance program and system of internal controls and procedures designed to ensure compliance with CPSC regulations. Peloton has also agreed to file, for a period of five years, annual reports regarding its compliance program and system of internal controls.
By a 4-0 vote the Commission approved the settlement, which is subject to public comment before it's final.
Peloton did not immediately release a statement about the settlement.
In a Securities and Exchange Commission filing in September, Peloton said the Department of Justice and the Department of Homeland Security had subpoenaed the company for documents and other information related to its reporting of the injuries associated with its products; it said the SEC is also investigating Peloton's public disclosures concerning the recall as well as other matters.
