Company to pay $650k penalty for failing to report defects

A Mississippi company has agreed to pay a civil penalty of $650,000 to settle allegations that it failed to immediately report defects in its inflatable baby boats.

According to the U.S. Consumer Product Safety Commission (CPSC), the company, Aqua-Leisure Industries, Inc. of Avon, MA implemented a recall in 2001 of 90,000 of its Sun Smart brand inflatable baby boats, following 12 reports of the seats tearing and causing children to fall into the water. However, the company continued to produce different versions of the inflatable boats, and received at least 24 additional consumer complaints between July 2003 and October 2008 in connection with faulty or defective seats in the boats. Aqua-Leisure finally notified the CPSC in May 2009 of these additional reports, and issued a recall of 4 million inflatable baby boats in July 2009.

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 this case, Aqua-Leisure received a total of 31 reports of boat seats tearing, resulting in children falling into or under the water. However, no injuries were reported.

In agreeing to the civil penalty, Aqua-Leisure has denied CPSC allegations that the inflatable baby boats posed an unreasonable risk of injury or death, or that the company violated the reporting requirement of the U.S. Consumer Product Safety Act.