Gree to Pay $15 Million for Recall Failures
Following a failure to report defective humidifiers, Gree has agreed to pay a mulit-million dollar civil penalty and improve upon internal compliance standards.
Gree Struck With Record Breaking Fine
The U.S. Consumer Product Safety Commission (CPSC) announced Friday that Gree Electric Appliances Inc., of Zhuhai, China; Hong Kong Gree Electric Appliances Sales Co. Ltd., of Hong Kong; and Gree USA Sales Ltd., of City of Industry, Calif., have agreed to submit a record $15.45 million civil penalty payment to the government to settle several charges which had been filed.
In addition to this, the company has been made responsible for the implementation of a new program to ensure compliance with the Consumer Product Safety Act (CPSA). This compliance program will require written standards, policies, and procedures to verify that all information regarding the firm’s compliance with CPSA, including reports and complaints, is conveyed to the employees responsible, regardless of whether or not an injury is referenced.
It must also address the confidential employee reporting of compliance concerns to a senior manager, effective communication of compliance policies and procedure, training, requirements for record retention, and responsibilities and oversight of compliance for the senior management and board.
The Charges Filed Against Gree
The penalty comes in response to several charges which had been filed against the company.
Firstly, Gree knowingly failed to report defects with dehumidifiers that were sold under 13 brand names including Frigidaire, GE, Kenmore, Gree, and Soleus Law-to the CPSC which posed an unreasonable risk of serious injury within the 24 hour timeframe mandated by federal law.
When the CPSC followed up with an investigation, they then knowingly misrepresented information. And lastly, they were charged with selling dehumidifiers bearing the UL safety certification mark in spite of being aware that the units failed to meet the UL flammability standards.
Gree’s dehumidifiers contained a defect which caused them to overheat and catch fire. Despite receiving multiple incident reports and making alterations to the design in an effort to solve the issue, the company didn’t report the defect immediately to the CPSC.
They also failed to immediately report the design changes or received incident reports. Incidents began in July 2012 and caused nearly $4.5 million in property damage.