On January 5, 2023, the Consumer Product Safety Commission (CPSC) reported Peloton agreed to pay a $19,065,000 civil penalty as a settlement regarding its Tread+ treadmill, approximately a year and a half after the CPSC and Peloton jointly announced the recall of the Tread+ treadmill in May 2021.

According to CPSC, as early as December 2018 and through 2019, Peloton received reports of incidents and injuries related to the Tread+ treadmills, and specifically related to pull under and entrapment in the rear of the treadmills. Peloton allegedly did not immediately report these incidents to CPSC, and by the time Peloton filed a report, there were more than 150 reports of people, pets and objects being pulled under the rear of the Tread+ treadmill, including the death of a child and 13 injuries. CPSC alleges Peloton knowingly failed to immediately report a defect with its product that had potential to create a substantial product hazard and created an unreasonable risk of serious injury to consumers. The civil penalty also settles charges that Peloton knowingly distributed recalled treadmills in violation of the Consumer Product Safety Act (CPSA).

Prior to the May 2021 recall, in April 2021, CPSC issued a warning to consumers about the danger of the Peloton Tread+ exercise machine after reports of multiple incidents of small children and a pet being injured beneath the machines.

In addition to the over $19 million penalty, Peloton is required to maintain a compliance program and system of internal controls and procedures designed to ensure compliance with the CPSA. Peloton also agreed to file annual reports regarding its compliance program and system of internal controls with the CPSC for the next five years.

This settlement reemphasizes the importance of creating and enforcing policies and procedures to ensure compliance with the CPSA requirements, particularly those related to consumer complaints and reports. Any company that creates, markets, manufactures, sells, or is materially involved with consumer products would be well advised to craft and enforce robust product safety, customer complaint, and safety reporting protocol. Of course, all consumer product companies should stay up to date on CPSC reporting requirements and work with the CPSC to make sure their products follow safety requirements.

If you have questions about this subject or related topics, please reach out to Sarah H. DeAgostino at (212) 912-3637 or sdeagostino@harrisbeach.com; or the Harris Beach attorney with whom you most frequently work.

This alert is not a substitute for advice of counsel on specific legal issues.

Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse, and White Plains, as well as Washington D.C., New Haven, Connecticut and Newark, New Jersey.