Peloton fined $19 million for not reporting treadmill safety issues
The defective treadmill resulted in the death of one child, according to the agency
Evolution VC Partners founder Gregg Smith provides insight into why Peloton still has tremendous value and how Big Tech could impact the product.
The Consumer Product Safety Commission (CPSC) on Thursday announced that Peloton has agreed to pay a $19 million fine after failing to report hazardous defects in its treadmill product.
Moreover, the agency claims the fine also results from the company knowingly distributing the recalled treadmills, which is a violation of the Consumer Product Safety Act (CPSA).
Before the company informed the CPSC, Peloton had received over 150 reports of incidents stemming from its Tread+ treadmill. Individuals, pets and objects would reportedly be pulled under the rear of the treadmill, causing severe injuries and at least one death of a child, according to the CPSC.
The Tread+ was initially recalled back in May 2021, according to a joint statement from the regulator and Peloton.
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Peloton has agreed to pay a $19 million fine after failing to notify regulators to defects with its Tread+ treadmill that resulted in at least one death and several injuries. (Ezra Shaw/Getty Images / Getty Images)
"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," the CPSC said in a press release.
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The agency added, "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."
The commission agreed to the settlement penalty with the company by a unanimous vote of 4-0.