Emilia Sweeney gives excellent advice for companies that discover one of their products may violate CPSC regulations:

Recalls of defective products are costly undertakings, especially when potential adverse publicity is considered in addition to the money actually spent on returns, repairs, or exchanges of the products. As costly as a recall may be, however, it can be costlier still if the manufacturer or retailer neglects to advise the United States Consumer Product Safety Commission (CPSC) of the defective product if the defect poses a safety threat to the consumer.

In January, for example, the Hoover Co. agreed to pay a $750,000 penalty to settle allegations that the company had failed to report to the CPSC the sale of vacuum cleaners with defective switches that could cause the appliances to catch fire. Every proper risk-management plan, therefore, needs to include protocols for contacting the CPSC when the company learns one of its products may pose a risk of injury to a consumer.

The federal Consumer Product Safety Act requires every manufacturer, distributor, and retailer to report to the CPSC a product that fails to comply with an applicable consumer product safety rule, whether statutory or voluntary; contains a defect that could create a substantial product hazard; or creates an unreasonable risk of serious injury or death. Failure to do so can result in significant penalties.

See the full article here.