Johnson Health Tech Agrees to Pay $3 Million Civil Penalty for Failure to Report Defective Fitness Equipment

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U.S. Consumer Product Safety Commission

Aug 14, 2015, 01:02 ET

WASHINGTON, Aug. 14, 2015 /PRNewswire-USNewswire/ -- The U.S. Consumer Product Safety Commission (CPSC) announced today that Johnson Health Tech Co. Ltd, of Taiwan, and Johnson Health Tech North America Inc., of Cottage Grove, Wis., have agreed to pay a $3 million civil penalty. The civil penalty agreement settles CPSC staff's charges that Johnson Health Tech knowingly failed to report to CPSC immediately, as required by federal law, regarding a defect and an unreasonable risk of serious injury with Matrix Fitness Ascent Trainers and Elliptical Trainers.

The fitness trainers' defect involved a build-up of moisture in the power sockets of the units from perspiration or cleaning liquids, which caused the machines to short circuit. Between March 2012 and October 2013, Johnson Health Tech received multiple reports of smoking, sparking or melted power components and reports of fires involving the trainers. Despite these reports and two design changes to fix the problem, Johnson Health Tech failed to report the defect, the consumer incidents or the design changes to CPSC immediately (within 24 hours). There were no injuries or property damage reported.

The Matrix Fitness Ascent Trainers and Elliptical Trainers were recalled in January 2014, after Johnson Health Tech had manufactured, imported and sold more than 3,000 units nationwide. The firm sold the trainers from September 2011 through December 2012 for between $6,000 and $11,000 each.

In addition to paying the $3 million civil penalty, Johnson Health Tech North America has agreed that the company has, and will maintain, a compliance program to ensure compliance with the Consumer Product Safety Act (CPSA) and a related system of internal controls and procedures.

The compliance program requires written standards, policies, and written procedures to ensure that all information regarding the firm's compliance with the CPSA, including reports and complaints, is conveyed to the firm's responsible employees, whether an injury is referenced or not. The compliance program also must address:

confidential employee reporting of compliance concerns to a senior manager;
effective communication of compliance policies and procedures, including training;
senior management responsibility for, and board oversight of compliance; and
requirements for record retention.

Johnson Health Tech does not admit to CPSC staff's charges.

The penalty agreement has been accepted provisionally by the Commission by a 3 to 2 vote.

http://www.cpsc.gov/en/Newsroom/News-Releases/2015/Johnson-Health-Tech-Agrees-to-Pay-3-Million-Civil-Penalty-for-Failure-to-Report-Defective-Fitness-Equipment/

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SOURCE U.S. Consumer Product Safety Commission