For full functionality of this page it is necessary to enable JavaScript. Here are the instructions how to enable JavaScript in your web browser Will a New Law Drive Product-Safety Risks out of the Shadows?
Jan
16

Will a New Law Drive Product-Safety Risks out of the Shadows?

An era marked by secrecy between the US Consumer Product Safety Commission and the companies it regulates may be nearing an end. At least if U.S. Representative Bobby L. Rush (D-Ill.) and the consumer groups supporting his recent bill have anything to do with it.

Rep. Rush recently introduced the SHARE Information Act which would allow the CPSC to release safety-related information without the threat of being sued by the product’s manufacturer. But it doesn’t stop there. The legislation would also increase financial penalties that could be levied against companies that violate product safety laws, including failing to share safety reports about the product they manufacture.

The current regulatory environment is largely a result of Section 6(b) of the 2011 consumer protection law which addresses an ongoing conundrum: who has the right to disclose a safety issue first, the regulator or the manufacturer? Since this issue is rooted in law, it will likely take an act of Congress to change it.

Not surprisingly, the bill is backed by Consumer Reports, the Consumer Federation of America, Kids In Danger, Public Citizen, and U.S. PIRG. These organizations have been representing victims and families of victims, pressuring manufacturers and the CPSC to take change the law. You don’t have to look far to see their involvement in issues related to strollers, sleep products, and elevators to name a few. And whether or not the SHARE Information Act gets any legs, their pressure will only increase.

Regulatory change via legislation is a slow, arduous process. But that doesn’t mean you should sit back and wait to see what happens. In fact, here are three things you should be doing regardless of where the SHARE Information Act goes:

  1. Re-evaluate when and how you disclose information to the CPSC and the public. Just because you don’t have to report something to the CPSC doesn’t mean you can’t. Likewise, just because you don’t have to recall a product, doesn’t mean you shouldn’t. Sometimes going above and beyond what is required is not only the right thing to do from a safety standpoint, but it can also create brand loyalty that lasts far longer than online chatter about a recall.
  2. Pay close attention to consumer advocates. Just because the CPSC won’t disclose safety issues ahead of you doesn’t mean that consumer advocacy groups will follow suit. In fact, some may jump at the chance. Not only is it aligned with their mission, it also gives them a chance to fundraise. So don’t just watch their activity. Take it an important step further and consider when and how you engage consumer advocacy organizations.
  3. Update your crisis plan. Consider how you will handle the public disclosure of a safety incident by not only consumer advocacy organizations but also the CPSC. Would you really file a lawsuit and risk the reputational fallout with consumers? Where would you draw that line? And how would that plan change if this legislation is passed?

What it comes down to is this: your product safety reputation rests on far more than whether you have issued recalls. If you’re targeted by consumer advocacy organizations or regulators, a recall is very likely the least of your worries. The fact is that the lawsuits, regulatory actions, continued consumer pressure and Congressional attention that may follow will cause a far bigger headache for you and your customers.

There’s so much we can learn by following regulatory, industry, and corporate-level developments across industries. Combined with our experience handling thousands recall events, we have a unique perspective on the risks, challenges, and often over-looked opportunities associated with these types of reputational matters. We’d love to share our thoughts with you. Contact us when you’re ready.

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