The U.S. Consumer Product Safety Commission (CPSC) has announced that Spin Master, Inc. has agreed to pay a civil penalty of $1,300,000. The penalty agreement has been accepted provisionally by the Commission (5-0). If you read this blog regularly, you know that a $1.3 million dollar fine from the CPSC is real coin.
This settlement comes after allegations were made that Spin Master knew, but failed to report, a defect and hazard associated with Aqua Dots. It was alleged that Aqua Dots were toxic, and contained a banned hazardous substance. Spin Master failed to report the defect immediately, as required by federal law, despite numerous reports of illnesses. It was only after CPSC received two reports of children who had ingested the product and had fallen into a coma (both later recovered). Two days later, Spin Master and CPSC announced a voluntary recall of approximately 4.2 million units of Aqua Dots. This can fairly be described as pretty awful, right?
Federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard, or ban enforced by CPSC.
Aqua Dots was a children’s craft kit and toy, that consisted of tiny beads of different colors. When sprayed with water, the dots stuck together, allowing children to create various shapes and designs.
While Spin Master did obtain an outside testing company to evaluate the toxicity of the product, the testing was inadequate. The recall announced that children who swallowed the beads could become comatose, develop respiratory depression, and have seizures.
Staff alleges that the chemical composition of Aqua Dots rendered the product a banned hazardous substance, prohibiting the importation and sale of the product. The Aqua Dots beads contained a chemical that the human body will convert to gamma-hydroxy butyrate (GHB), which is also known as the “date-rape” drug. In agreeing to the settlement, Spin Master denies CPSC staff allegations that it knowingly violated the law.
Aqua Dots craft kits were sold nationwide from April 2007 to November 2007, for between $17 and $30. Target and Toys R Us were both correctly criticized when they advertised a sale on Aqua Dots, even though the recall had been announced. Target stated that the circulars were so far into production that they couldn’t impact it when the recall was made. Many felt that stores should have sent the circulars back into production to remove the Aqua Dots from appearing on sale.
What you have, throughout this mess, is companies that put profits over people. Will this fine make a difference? Frankly, I doubt it.