Company pays penalty for failing to report defects

A Mississippi company has agreed to pay a civil penalty of $715,000 to settle allegations that it failed to immediately report defects in certain models of its off-road utility vehicles.

According to the U.S. Consumer Product Safety Commission (CPSC), the company, Bad Boy Enterprises, implemented a repair program in 2008 to address reports of sudden acceleration with the off-road vehicles, but failed to notify the Commission of the product defect until August 2009. The CPSC and Bad Boy Enterprises announced an initial recall in October 2009. However, further investigation determined that the company did not provide the Commission with full information about the scope of the problem until May 2010, resulting in a second recall in December 2010. By that time, the company had received more than 50 reports of sudden acceleration incidents, resulting in a variety of injuries to consumers.

Federal law requires that manufacturers, distributors and retailers immediately (i.e., within 24 hours) report to the CPSC information that a product contains a defect which could create a substantial product hazard or pose a risk of injury or death to consumers.

In agreeing to the civil penalty, Bad Boy Enterprises has denied CPSC allegations that it knowingly violated the law.