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Toymaker Fined $1.1 Million For Consumer Violations

Company accused of not providing data on products

By Mark Huffman
ConsumerAffairs.com

April 15, 2009

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Mega Brands America Inc., of Livingston, N.J., formerly Rose Art Industries Inc., has agreed to pay a $1.1 million civil penalty, settling allegations that the company failed to provide the government with timely information about dangers to children with Magnetix magnetic building sets, as required under federal law.

In December of 2005, Rose Art filed an "initial report" with the Consumer Product Safety Commission that a 22-month-old child from Washington state had died, due to ingesting multiple magnets that fell out of pieces from a Magnetix set. The report contained no other product or incident information and Rose Art attributed the magnets falling out to unusually abusive play by the toddler's older siblings.

On February 1, 2006, Rose Art submitted a full report that again lacked incident and product information, the agency said. Rose Art stated that it did not retain any complaint or incident records. On March 31, 2006, Rose Art voluntarily recalled nearly 4 million Magnetix sets for users under the age of 6.

After discovering documents that led CPSC staff to believe Rose Art had compiled incident information, a subpoena was issued to the firm — which had been renamed Mega Brands America and was under new ownership and control — to obtain product and incident information.

CPSC said it learned through the subpoena that at the time Rose Art filed its "initial report" in December 2005, it had received over 1,100 consumer complaints that magnets had fallen out of plastic pieces from dozens of different Magnetix models. Additionally, the subpoena revealed that Rose Art had received at least one report of an injury due to magnet ingestion, prior to the toddler's death in Washington state.

By the time Rose Art agreed to the recall of Magnetix in March 2006, it had received more than 1,500 complaints of magnets falling out of plastic pieces in more than 65 different models of Magnetix, according to the CPSC.

In April 2007, Mega Brands America expanded the recall of Magnetix sets for users of any age, after more than 25 children suffered intestinal injuries that required surgery to remove the magnets.

Federal law requires firms to report to CPSC within 24 hours of obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or violates any consumer product safety rule, or any other rule, regulation, standard, or ban enforced by CPSC.

In agreeing to settle this matter, Mega Brands America and its parent, Mega Brands Inc., of Montreal, Canada contend that 1) Mega Brands Inc. did not know of the Magnetix defect at the time it acquired Rose Art and 2) Rose Art's prior owners never advised Mega Brands Inc. of the problems of associated with Magnetix.

CPSC said it strongly encourages consumers to check to see if they have any of the recalled building sets and return them to Mega Brands for a free replacement toy. Potentially millions of recalled units remain in homes today and accessible to young children.

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