Kolcraft Enterprises of Chicago has agreed to pay a civil penalty in the amount of $400,000 resolving allegations that it knowingly failed to report a defect involving its Travelin' Tot play yards.
In addition to paying the civil monetary penalty, Kolcraft agreed to implement robust changes to its internal control and compliance systems. Specifically, Kolcraft agrees to:
- maintain and enforce a system of internal controls and procedures to ensure that the company promptly and accurately reports required information about its products to the Consumer Product Safety Commission (CPSC);
- give CPSC staff written documentation of its improvements, processes, and controls related to its reporting procedures upon request;
- and establish an effective program to ensure it remains in compliance with safety statutes and regulations enforced by CPSC.
Kolcraft agrees that, at a minimum, its compliance program must provide its employees with written standards and policies, compliance training, and the means to report compliance-related concerns confidentially.
CPSC staff alleged that the firm knowingly failed to report to CPSC immediately, as required by federal law, a defect involving Kolcraft Travelin' Tot play yards and play yards manufactured by Kolcraft for Carter's, Sesame Street, Jeep, Contours, Care Bare, and Eric Carle. The play yards were sold nationwide from January 2000 through January 2009 for between $50 and $160.
The side rail of the play yards can fail to latch properly and can unlatch unexpectedly when a child pushes against it, posing a fall hazard to children.
In August 2005, failure analysis experts hired by the firm identified the potential for false latching. In 2006, the firm made prospective improvements to the warning labels, instruction sheets, and the side-rail latch to eliminate false latching in future production of the play yards.
From about January 2000 through July 2009, Kolcraft received about 350 reports of the play yard collapsing, resulting in 21 injuries to young children, including bumps, scrapes, bruises, and one concussion.
Kolcraft did not report the information regarding the play yards to CPSC until January 2009.
In July 2009, Kolcraft and CPSC announced the recall of one million play yards.
Federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after 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 fails to comply with any consumer product safety rule or any other rule, regulation, standard, or ban enforced by CPSC.
In agreeing to the settlement, Kolcraft denies CPSC staff allegations that its play yards contained a defect which could create a substantial product hazard, or that it knowingly violated the reporting requirements of the Consumer Product Safety Act.