National Highway Traffic Safety Administration Issues Record Fine Against Honda

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The National Highway Traffic Safety Administration issued a record fine against Honda in January 2015. These updates inform us of potential dangers in the manufacturing of components in our car that may adversely affect the overall safety. How do you know if your car manufacturer is honestly reporting faults or malfunctions in their product? Chances are that after the most recent ruling by the National Highway Traffic Safety Administration (NHTSA), they would rather recall their product than risk any impropriety.

The NHTSA has meted out a $70 million fine against Honda. This fine sets the record as the largest fine in the history of the administration.

Honda has been accused of failing to report data required under the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act over the past eleven years. Since November of 2003, Honda has allegedly failed to report approximately 1,729 complaints. The automaker allegedly failed to report issues ranging from warranty claims, to claims that the vehicles were responsible for injuries and death.

The TREAD Act

The TREAD act was signed into law in 2000. The law was enacted to increase consumer safety by creating criminal liability in car manufacturers that failed to report vital information. The act required the reporting of data regarding recalls, safety defects, and other information that might serve as an indicator of the level of safety of vehicles manufactured both here in the United States and abroad. Under the act, when a company issues a recall on one of its cars overseas, it would issue a report to the NHTSA here in the United States. The NHTSA would then release the report to the public. By creating a sort of early warning system, the act allows consumers to utilize the information reported to stave off any potential safety risks before serious injury occurred

Under the act, the maximum that the NHTSA may deal out in fines is 35 million. In reaching the 70 million fine, the Administration split the claim into two separate issues: the failure to report the warranty information resulted in a $35 million fine, and the failure to report the injuries and death resulted a separate $35 million fine.

A Warning

Honda first became aware of the oversights in 2011, but only reported them in 2014. The company claims that the failures to report stemmed from basic clerical errors, technical difficulties, and confusion over the regulations governing the reporting.

The NHTSA has stated via press release that the ruling is meant to set a strict precedent regarding the responsibility of manufacturers to adhere to the early warning requirements of the TREAD Act.

Dr. Mark Rosekind of the NHTSA stated, “Today’s announcement sends a very clear message to the entire industry that manufacturers have responsibility for the complete and timely reporting of this critical safety information…The actions we are requiring will push Honda to significantly raise the bar on the effectiveness of its EWR reporting program. Our ongoing oversight will ensure compliance and determine if there is cause for additional actions.”

As part of the judgment, Honda is also required to review their reporting procedures in order to bring them in line with NHTSA guidelines. They will be required to revamp their training procedures, and engage third-party auditors to screen for future compliance.


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