Peloton agrees to pay $19 million over failure to report safety hazard
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Peloton has agreed to pay a $19 million civil penalty over its failure to immediately report safety hazards associated with its treadmills, the U.S. Consumer Product Safety Commission announced Thursday.
Driving the news: The settlement resolves the commission's charges that accused Peloton of knowingly failing to report, as required by law, that its Tread+ treadmill had a defect that created a "substantial product hazard" and "an unreasonable risk of serious injury."
- It also settles charges that the company knowingly distributed recalled treadmills.
Background: Starting in 2018, Peloton received reports of incidents associated with its treadmills, including reports of injuries.
- Despite having the information, Peloton did not immediately report it to the Consumer Product Safety Commission, per the agency.
- By the time Peloton filed a report with the commission, there were more than 150 reports of people, pets, and/or objects being pulled under the rear of the treadmill, including the death of a child and 13 injuries, the commission said.
- The product was eventually recalled in May 2021.
What they're saying: "Peloton remains deeply committed to the safety and well-being of our Members and to the continuous improvement of our products," the company said in a statement to Axios.
- "We are pleased to have reached this settlement agreement with the U.S. Consumer Product Safety Commission (CPSC) and look forward to working cooperatively with the CPSC to further enhance Member safety. As such, Peloton continues to pursue the CPSC’s approval of a Tread+ rear guard that would further augment its safety features."
Zoom out: The $19,065,000 fine comes as the company has been cutting costs and thousands of jobs after it misjudged e-commerce trends and expanded too rapidly.
Of note: Peloton also agreed to file annual reports for five years, regarding its compliance program and system of internal controls.
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