Haier America Trading LLC has agreed to pay a civil penalty of $587,500 to settle allegations that it failed to inform the Consumer Product Safety Commission (CPSC) of a defect and fire hazard in the company's Oscillating Tower Fan, model FTM140GG.

The penalty settlement, which has been provisionally accepted by the Commission, resolves CPSC staff allegations that New York City-based appliance manufacturer knowingly failed to report immediately -- as required by federal law -- that the fan posed a risk of fire. Repeated bending of the fan's wires during oscillation caused the wires to break, resulting in a fire hazard.

From May 2004 to October 2004, Haier America received as many as 14 reports of incidents involving the fans, including some fires and one report of injuries. During that time, it conducted testing and other analysis.

Haier America finally reported to CPSC in December 2004, only after CPSC asked the company to report. In November 2005, Haier America and CPSC announced a recall of the fans.

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 violates any consumer product safety rule or any other rule, regulation, standard, or ban enforced by the CPSC.

"Prompt reporting in this case could have prevented fires and injuries," said CPSC Chairman Inez Tenenbaum. "Companies have a responsibility to immediately let us know of potential hazards, and we will hold them to their duty."

Fans aren't the only Haier America appliances with problems.

Darcee of Aptos, California, tells Consumeraffairs.com that a few days after her new (full size) Haier fridge was installed she noticed a small puddle near the base. She says the tray under the freezer was full with a sheet of ice.

When she called for repair, she was told by the repairman (verbally and in writing) that the problem was that the tube that should drain condensation had been "foamed up" with insulation during manufacturing. She says the service tech also warned that she was likely to have other problems because of the defect.

Darcee says customer service at Haier said "someone" would "get back to us" regarding a replacement. She says she's still waiting.

Mike from Columbus, Indiana, says a Haier dishwasher he bought stopped working less than 3 months after he bought it. He tells Consumeraffairs.com that when he called the company he was told that there were no service people in his area -- that he should return dishwasher to Menards where he bought it and exchange it.

Menards gave Mike a refund on the spot, but he says he spent another $220.00 for a better brand, asking what is the use of a warranty if the company does not have service techs in the area.

In agreeing to the Oscillating Tower Fan settlement, Haier America denies CPSC's allegations.