Peloton Agrees to Pay $19 Million Civil Penalty for Failure to Immediately Report Tread+ Treadmill Entrapment Hazards and for Distributing Recalled Treadmills
Posted: January 5, 2023 in Suppliers
WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission (CPSC) is announcing that Peloton Interactive Inc., of New York, has agreed to pay a $19,065,000 civil penalty. The settlement resolves CPSC’s charges that Peloton knowingly failed to immediately report to CPSC, as required by law, that its Tread+ treadmill contained a defect that could create a substantial product hazard and created an unreasonable risk of serious injury to consumers. The civil penalty also settles charges that Peloton knowingly distributed recalled treadmills in violation of the Consumer Product Safety Act (CPSA).
Beginning in December 2018 and continuing into 2019, Peloton received reports of incidents associated with pull under and entrapment in the rear of the treadmills, including reports of injuries. Despite possessing this information, Peloton did not immediately report to the Commission. 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 Tread+ treadmill, including the death of a child and 13 injuries, including broken bones, lacerations, abrasions and friction burns. Peloton and the Commission jointly announced the recall of the Tread+ treadmill on May 5, 2021.
Staff also charged that after the public announcement of the recall, Peloton knowingly distributed in commerce 38 Tread+ recalled treadmills using Peloton personnel and through third-party delivery firms.
In addition to the $19,065,000 civil penalty, the settlement agreement requires Peloton to maintain an enhanced compliance program and system of internal controls and procedures designed to ensure compliance with the CPSA. Peloton has also agreed to file, for a period of five years, annual reports regarding its compliance program and system of internal controls.
By a 4-0 vote, the Commission provisionally accepted the settlement agreement, subject to public comment.