PHILADELPHIA -- Peloton has agreed to pay a $19 million fine in connection with a delayed and faulty previous recall. It is one of the largest penalties ever imposed upon a company by the Consumer Product Safety Commission.
The recall was in 2021 and involved the Peloton Tread+.
The CPSC says Peloton failed to immediately report the defective machines and knowingly continued to make them available for sale even after the recall was announced.
"This is a vital settlement for safety," said William Wallace, associate director of safety policy for Consumer Reports. "Because it shows that if you violate our safety laws, you're going to be held accountable as a company."
The treadmills are tied to 13 injuries, the death of a 6-year-old child, and multiple reports of incidents of people, pets, and objects being pulled underneath.
"Peloton was sitting on 150 different incident reports before they even flagged that this was a problem for our safety regulators," said Wallace. "And so even though Peloton did ultimately recall these products in May 2021, they didn't do so immediately."
"Even after the recall Peloton continued to make these treadmills available for sale," asked consumer reporter Nydia Han.
"That's right, that's part of the settlement today because they continued to distribute the Tread+ for a while after the recall was in place, which is against the law," said CPSC Commissioner Alexander Hoehn-Saric.
"Do you hope this sends a message to other companies," Han asked.
"Companies should be warned that the CPSC is here, that we will take this extremely seriously, that we will go after them and make the marketplace safe for consumers," said Hoehn-Saric.
The CPSC also says this shows the agency must often rely on consumers rather than companies to report issues.
"I urge them to go to safer products.gov, report it to us, let us know, we will investigate and you could be saving somebody else's life," he said.
Peloton says it's pleased to have reached the settlement agreement and looks forward to working cooperatively with the CPSC to further enhance member safety, including getting approval for a Tread+ rear guard.
Full Peloton Statement:
"Peloton remains deeply committed to the safety and well-being of our Members and to the continuous improvement of our products. 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."