Wednesday, January 21, 2015
Honda Motor Co Fined $70 Million for Under Reporting Injuries
American Honda Motor Co. Inc. has agreed to pay $70 million in fines to resolve allegations made by US federal regulators that during a near 10-year period, from 2003 to 2014, the auto maker failed to report 1729 deaths and injuries related to possible safety defects in its vehicles. According to the National Highway Traffic Safety Administration (NHTSA), Honda will pay two $35 million civil penalties, effectively resolving its alleged lapses in early-warning reporting.
The early-warning reporting requirements are part of the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act, which requires car manufacturers to submit reports to the NHTSA every quarter to alert the agency of deaths or injuries arising from possible safety defects. The NHTSA states that Honda failed to provide early-warning reports to the agency to alert it about safety-related issues. The fines also address Honda's alleged failure to report some warranty claims and customer satisfaction-related claims during that time, according to the agency.
Honda faced a barrage of class actions related to defective Takata air bags late in 2014, after which the NHTSA issued a special order directing Honda to explain its failure to fully report deaths and injuries related to possible auto safety defects, as required under the TREAD act.
According to the early-warning reports filed with the NHTSA, the 1,729 unreported injuries and deaths that Honda allegedly failed to report constituted more than double the number of incidents the automaker reported to the NHTSA during the past 11 years.
According to Honda, the under-reporting of those death and injury notices was due to “errors related to data entry, computer coding, regulatory interpretation, and other errors in warranty and property damage claims reporting.” Therefore, under the terms of the settlement, Honda has also agreed to conduct third-party audits of its reporting, train its staff in fulfilling TREAD Act requirements and devise compliance procedures, the NHTSA said.