The Consumer Product Safety Commission (CPSC) is a federal agency charged with protecting the safety of consumers. However, as we’ve learned over the past year, it often does so with a misdirected dedication and zeal that causes unintended harm to small businesses.
Case in point: The so-called “lead laws” that prevent the sale of ATVs and dirt bikes to kids age 12 and under.
Now, there’s another big project that could create more unintended problems for small businesses in the powersports industry— both retailers and manufacturers. It’s called the Consumer Product Safety Information Database, and it’s slated to go live in March, only about three months away.
While the majority of CPSC commissioners said the impact of the database on small businesses would be minimal, others disagree. Here’s CPSC Commissioner Nancy Nord, who voted against the final rule: “The majority makes the bald and unsupported assertion that this rule will have no impact on small business,…. This conclusion ignores examples we have in the agency of companies harmed by unfounded complaints made against products later determined not to be unsafe.”
The CPSC is nearly set to roll with this project— it recently voted 3-2 to publish the final rule in the Federal Register on Dec. 9; the rule becomes effective Jan. 10. The database has been mandated by Congress as part of the Consumer Product Safety Improvement Act (CPSIA), the same piece of legislation that brought us the infamous “lead law” that prevented the sale of kid’s quads and dirt bikes. The CPSIA was signed by President Bush in August 2008.
Collecting accident data isn’t anything new for the CPSC; the agency has been doing it for decades. But here’s the big change: that data basically was kept private and was available only through the Freedom of Information Act (FOIA), a laborious process that tended to protect companies from exposure to frivolous complaints.
At first glance, the idea behind the Product Database seems to be a good one: Use the latest technology to let consumers report safety issues they have had with products by letting them post this information in a searchable database located on a public website operated by a recognized federal agency, the CPSC. The goal is to make the report transparent; guidelines will require consumers to identify themselves, will provide a detailed reporting process, will require consumers to fill out a detailed “accident report,” and will require them to identify the manufacturer of the product they are reporting. Seems like a good idea, especially if there are some basic safeguards built into the process to protect business from unfair and inaccurate postings.
Hmmmmm. The devil always is in the details, isn’t it? And that could be the problem here, according to many observers.
Apparently, the CPSC has made an effort to get this project right, unlike the actions it took with the lead law. One CPSC official said the agency spent more than two years in research and planning on the database project, and talked with some 1,000 stakeholders during the process. However, here are some of the details that could jump up and bite companies in our industry.
The complaints will apply only to products under the jurisdiction of the CPSC. That’s good. Unfortunately, those products include off-road vehicles such as ATVs, UTVs, and dirt bikes, as well as components used in these products. It’s not clear whether or not this would include accessories. On-highway motorcycles are not included because they are regulated by the National Highway Traffic Safety Administration (NHTSA).
Consumers will have to explain the harm they have suffered or any injury, illness, or death to which they have been exposed. Critics have pointed out that “risk of injury” is pretty broad and that the definition should be tightened up. The CPSC disagreed. Do you think there is “risk of injury” in riding a dirt bike, even under controlled race conditions? That seems to offer a huge opportunity for abuse, intentional and unintentional.
Further, critics argue that the definition of “consumer” is so broad as to include those who were not injured and those who do not even have first hand information about an incident. The agency’s response: “The plain statutory language does not require a submitter of a report of harm to have ‘first hand knowledge.’ … Historically, we have received reports of harm from any and all consumers in order to protect individuals who use consumer goods.”
That means that a grandparent who considered dirt bike riding as dangerous could file a report without ever having seen any one ride a dirt bike. Ouch.
It also allows “others’ to submit complaints. Others include attorneys, investigators, non-government organizations, consumer advocates and consumer advocate organizations. It’s not much of a stretch of the imagination to see how attorneys and others could use the database to build a case against an OEM or a component manufacturer. And in case there is a lawsuit, it’s likely that an attorney for the plaintiff would include the retailer (that’s you, Mr. powersports dealer) as well as the manufacturer in naming a list of defendants.
In voting against the final rule, the CPSC’s Nancy Nord didn’t mince any words about her feelings: “I voted against the final rule on the public database because it is so flawed that it is both contrary to the statute and to good public policy. Congress,” she continued, “directed that the database be established but, presumably, expected that we would use both good sense and practicality in carrying out its mandate. We have used neither.”
She described the rule as being “poorly conceived” and including “excessive regulation.” Nord cited several problems that she sees with the new rule:
- SUBMISSIONS. Anyone can file a complaint, including lawyers, competitors, labor unions and advocacy groups who may have hidden agendas.
- CORRECTIONS. “Unfortunately,” she says, “inaccuracies probably will not be corrected.” There is no mechanism for correcting inaccuracies. “As a result,” she notes, “there is a good chance that this will be a ‘post it and forget it’ activity with inaccurate information remaining in a government sanctioned database.”
- VERIFICATION. “We will not be verifying the substance of information submitted…. consumers expect that if they post a complaint, it will be investigated and acted upon. Consumers will be disappointed in both respects,” says Nord, adding, “… it is entirely predictable that inaccurate information in the database will migrate to the public through modern electronic communications.”
One final note: As CPSC Commissioner Anne Northrup has noted, in addition to “reputational black eyes, the database is apt to generate more lawsuits against consumer product manufacturers,” which could lead to “higher prices, some safe products being pulled from the market, and even some good companies going out of business.”
You can see the database at www.saferproducts.gov. For additional information, contact Mary Kelsey James, Director,, Information Technology Policy and Planning, Consumer Product Safety Commission, (301) 504–7213; email@example.com.