Honda fined $70 million for unreported safety issues
January 08, 2015
Honda will pay $70 million for failing to report deaths, injuries, and warranty claims to the federal government in violation of the TREAD Act.
In the settlement, finalized just before the New Year, Honda also agreed to increased oversight U.S. Department of Transportation's National Highway Traffic Safety Administration and audits to ensure that all required reporting is completed now and into the future.
In 2014, NHTSA issued more than $126 million in penalties, which is more than the total amount collected by the agency during its 43-year history.
NHTSA's investigation into Honda's safety reporting found that the automaker failed to submit early warning reports identifying potential or actual safety issues.
The first penalty of $35 million is for Honda's failure to report 1,729 death and injury claims to NHTSA between 2003 and 2014.
The second $35 million penalty is due to its failure to report certain warranty claims and claims under customer satisfaction campaigns during the same time period. Details are available in the audit report prepared for Honda by Bowman and Brooke and in Honda's Response to NHTSA's Special Order addressing the violations.
Federal law requires manufacturers to submit early warning reports of potential safety concerns to NHSTA. These quarterly reports include production information; incidents involving a death or injury; and data on property damage claims, consumer complaints, and warranty claims. The information is used to investigate whether safety defects or defect trends exist and if further action, including possible recalls, is needed.
In addition to the penalties and increased government oversight, Honda is required to provide NHTSA's Early Warning Division with information about the 1,729 unreported death and injury incidents and the warranty claims.
Although 2014 was a record year for civil penalties, the fines are limited by a congressionally established $35 million dollar cap, the amount Honda will pay for each of the two violations, Foxx said.
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