Current Events in December 1999

Black & Decker Fined $575,000
For Hiding Toaster Defect

WASHINGTON, Dec. 30, 1999 -- Black & Decker will pay a civil penalty of $575,000 for failing to report defects in its Spacemaker toasters, even though the company knew the units had caused more than 1,000 fires.

The penalty is one of the largest ever paid to the Consumer Product Safety Commission (CPSC) agency.

The penalty resolves charges that the Towson, Md., company's Spacemaker T1000 Type 1 Horizontal Under-the-Cabinet Toasters contained defects, and that the firm failed to report the problem to the agency in a timely manner as required by law.

CPSC also charged that Black & Decker withheld consumer complaint information and important engineering documents during CPSC's investigation. Although the company agreed to the civil penalty, Black & Decker denied it violated the law.

The Spacemaker T1000 Type 1 is a horizontal toaster installed under a kitchen cabinet. The toasters, still under recall, can allow food to catch fire. Because they have a door that automatically opens and a food rack that extends outward, flames from the food can escape the unit, exposing kitchen cabinets and their contents to the fire.

The toasters were sold from 1994 through 1996 for about $50 to $64. Consumers can identify the recalled toaster because they are the only Spacemaker Toasters that have an "OPEN" button, located on the control panel on the right side of the toaster.

Consumers should stop using the Spacemaker T1000 Type 1 Under-the-Cabinet Toaster immediately and contact Black & Decker at (800) 746-2159 to participate in the recall.

For more information, call Black & Decker or access their web site.

The Spacemaker T1000 Type 2 toaster does not open automatically and is not part of the recall.

WASHINGTON, Dec. 22, 1999 -- Kelty is recalling for repair approximately 26,000 Kelty K.I.D.S. backpack child carriers. The seat height adjustment strap on these carriers can slip out of the buckle. A child can slide downward in the seat unexpectedly and could fall out of the carrier.



Kelty has received two reports of children slipping down inside the carriers after the height adjustment strap came loose. Neither child fell out of the carrier, and there were no reports of injury. The recall is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

There are six models of these Kelty K.I.D.S backpack carriers: Expedition, Trek, Explorer, Country, Elite and Town. The model name is written on the side of the carrier. The carriers are blue and have the Kelty K.I.D.S. logo on the back rest of the seat.

Kelty also manufactured a carrier that L.L. Bean sold under its "L.L. KIDS" label and has the "Kelty" logo on the black frame hinge that connects the kickstand to the main frame.

Specialty and sporting good retailers, including L.L. Bean, REI and Eastern Mountain Sports, sold the recalled backpack carriers nationwide from March 1999 through December 1999 for between $100 and $250.

Consumers should immediately stop using these backpack carriers, and contact Kelty for instructions on getting the free repair kit. For more information, consumers should call Kelty at (800) 423-2320 between 10:30 a.m. and 7:30 p.m. ET Monday through Friday, or go to Kelty's web site at www.kelty.com.

Kelty and L.L. KIDS carriers purchased prior to March 1999 have a different type of seat adjustment strap and are not included in this recall.

Class Action Suit Against Ford Alleges Windstar Engine Defects

CHICAGO, Dec. 21, 1999 - Ford Motor Company is named in a class action lawsuit alleging major defects in the 3.8-liter engine used in thousands of vehicles, including the 1995 Ford Windstar minivan.

The suit filed on behalf of Lance Lhotka and other Ford owners by Horwitz, Horwitz & Associates charges that the defect in the engine results in premature failure of the head gaskets and that Ford has refused to assume responsibility for the defect.

Claims brought against Ford include breach of warranty, breach of contract and violations of the Illinois and Michigan statutes prohibiting unfair and deceptive acts and practices.

Owners of the popular Windstar vans have aired their complaints on ConsumerAffairs.Com and other popular consumer sites.

One such Windstar owner - identified as Jeff of Okemos, Mich. - said the head gaskets on his Windstar failed at 67,000 miles on July 26, 1999. He learned from his local dealer that Ford was refusing to assume any responsibility for failures after 60,000 miles or five years.

"Since my car had 67,000 miles on it, I was out of luck," Jeff said.

Persons wishing to discuss this case or with questions regarding the rights of those affected by the lawsuit can contact Clifford W. Horwitz or Richard Daughtery at Horwitz, Horwitz & Associates at http://www.mylawyers.com or by calling (312) 372-8822

News Page | Windstar Page.

WASHINGTON, Dec. 20, 1999 -- In theory, the National Highway Traffic Safety Administration (NHTSA) keeps a wary eye on automakers, swooping in to order recalls when safety defects are found.

But in reality, NHTSA, like most federal agencies, relies on the auto industry to report problems. Thus, if an automaker is slow to report problems, the agency may not find out about them until it's too late to do anything.

Once a car is eight years old, it can no longer be recalled, so it is in the automakers' best interests to stall as long as possible.

Ford Motor Co., for example, denied for five years that its vehicles were prone to steering-column fires before finally launching the largest auto safety recall in history in 1996.

By then, a number of motorists had died and many others had been injured in fires which allegedly resulted from faulty ignition switches in the steering columns of their Fords.

Ford quietly conducted a limited recall, replacing the faulty switches in some 27,000 fleet vehicles while publicly denying that there was a problem. Public pressure mounted as lawsuits were filed.

Ford eventually paid a $425,000 settlement to NHTSA for allegedly concealing information about the ignition-switch problems. But critics said it saved much more than that by reducing the number of vehicles it had to recall and repair. Even so, it wound up recalling eight million cars, trucks and vans.

"They lie all the time," former NHTSA administrator Joan Claybrook was quoted as saying in a recent Los Angeles Times story. Industry officials denied it.

In fact, NHTSA frequently learns about auto-safety defects the same way everyone else does -- through press reports following a product-liability lawsuit.

Critics of consumer class-action lawsuits seldom mention that such suits have become a major factor in ensuring that product safety defects are brought to the attention of consumers and regulators who are supposed to keep unsafe products off the market.

Ford is hardly the only automaker to have been slow to blow the whistle on itself.

• Saturn General Motors originally denied that seat recliners sometimes caused Saturn front seats to flop backwards, causing accidents and injuries.
• Suzuki Samurai During a NHTSA investigaiton, Suzuki failed to disclose records showing that General Motors had declined to market the Samurai because of its tendency to rollover.
• Ford Bronco II Despite their involvement in at least 900 fatal rollovers, Ford was slow to produce data during a NHTSA probe.

NHTSA is trying to become more aggressive. It recently sent a stern letter to automakers demanding prompt and complete reports on defects.

The agency is reported to be conducting an extensive investigation of whether Chrysler has withheld information about fuel system leaks in some of its models built from 1993 to 1997. Chrysler recalled 680,000 vehicles iin 1998 but NHTSA wants to know whether the automaker could have done more sooner.

Gap/Old Navy Recall Children's Pajamas

The action is being conducted in cooperation with the U.S. Consumer Product Safety Commission (CPSC).

The six different styles of pajamas being recalled are all made with 100 percent polyester fabric. The pajamas have style numbers 353558, 353554, 733002, 733032, 466291 and 674060. The style numbers are located on labels sewn into the side seams or collar of the garments.

Style 353558 are two-piece, front-button style with long sleeves and long pants. These flannel pajama sets come in yellow with penguin print or navy blue with bear print. The sets are labeled "Gap," and "100% polyester." They were sold in sizes 2 through 14.

Style 353554 are two-piece, front-button style with long sleeves and long pants. These fleece pajama sets come in white, blue and pink with a snowflake print. The sets are labeled "Gap," and " 100% polyester." They were sold in sizes 2 through 14.

Style 733002 are one-piece, footed, zipper-front style with long sleeves. These fleece pajamas come in blue with a white snowflake print. The pajamas are labeled, "baby GAP," and "100% polyester." There were sold in infant and toddler sizes XS through 4XL.

Style 733032 are one-piece, footed, zipper-front style with long sleeves. These fleece pajamas come in black and white pony print and a cheetah print. The pajamas are labeled "babyGap," and "100% polyester." They were sold in infant and toddler sizes XS through 4XL.

Style 466291 are one-piece, footed, zipper-front style with long sleeves. These fleece pajamas come in navy with a white star print. The pajamas are labeled "babyGap," and "100% polyester." There were sold in infant and toddler sizes XS through 3XL.

Style 674060 are two-piece, front button top with long sleeve, long pants. The sets come in lavender or blue with white piping around the pant cuff with a shirt that has piping around the collar, front placket and cuff. The pajamas are labeled "Old Navy," and 100% polyester." They were sold in infant size 6-12 months through toddler size 2T-3T.

GapKids, babyGap, Gap Outlet and Old Navy stores nationwide sold these pajamas from August 1999 through December 1999 for between $20 and $39.

Parents and caregivers should immediately stop allowing children to wear these pajamas and return them to any Gap or Old Navy location for a refund and a $10 gift certificate. For more information, consumers should call Gap Inc. at (800) GAPSTYLE or (800) OLD NAVY between 7 a.m. and 6 p.m. PT Monday through Friday, or go to their web site at gapinc.com/performance/news_releases/dec2_99_other.htm.

Ford Motor Credit to Pay $650,000 to Settle FTC Charges It Violated the Equal Credit Opportunity Act

WASHINGTON, Dec. 9, 1999 -- The Federal Trade Commission has negotiated an agreement under which Ford Motor Credit Corp. will pay $650,000 for alleged violations of the Equal Credit Opportunity Act (ECOA).

According to the FTC, for a 15-month period from May 1994 to August 1995, Ford Credit discriminated against certain credit applicants by failing to aggregate the income of unmarried joint applicants, while combining incomes for applicants who were married. As a result, the FTC alleged, many unmarried joint applicants were offered credit on less favorable terms than married applicants. 

"Millions of consumers use credit," said Jodie Bernstein, Director of the FTC's Bureau of Consumer Protection, "and the Equal Credit Opportunity Act guarantees that they are given an equal chance to get it. While lenders can use a variety of factors to compute a consumer's creditworthiness, marital status isn't one of them. This settlement tells lenders and would-be borrowers that credit discrimination won't be tolerated."

The $650,000 is among the largest settlements ever obtained by the Commission in an ECOA-related matter; in May of this year Franklin Acceptance Corporation, a Philadelphia-based finance company, paid an $800,000 civil penalty for similar alleged ECOA violations, as well as Fair Credit Reporting Act violations. 

The ECOA prohibits discrimination against an applicant for credit on the basis of race, color, religion, national origin, sex, marital status, or the fact that an applicant's income is derived from public assistance. Regulation B specifically prohibits discounting or refusing to consider income on the basis of marital status.