Peloton to pay $19 million fine over treadmill hazard -U.S. regulators
Reuters
Published Jan 05, 2023 11:12AM ET
Updated Jan 05, 2023 01:06PM ET
By David Shepardson and Susan Heavey
WASHINGTON (Reuters) - Peloton Interactive (NASDAQ:PTON) Inc has agreed to pay a $19 million fine for failing to promptly report a defect with its Tread+ treadmill that could cause serious injury, U.S. regulators said on Thursday.
The Consumer Product Safety Commission (CPSC), in a statement, said the civil penalty would resolve the agency's charges that the company had received more than 150 reports of incidents where users were pulled under and entrapped by the time it notified regulators.
The penalty also settles charges that Peloton knowingly distributed recalled treadmills in violation of the Consumer Product Safety Act (CPSA).
Peloton shares were down 4% at $8.49 in early trading on Thursday.
The 150 reports included the death of a child and 13 injuries, including broken bones, lacerations, abrasions and friction burns, CPSC said.
Peloton and the CPSC jointly announced the recall of the Tread+ treadmill in May 2021.
The agreement requires Peloton to "maintain an enhanced compliance program and system of internal controls and procedures designed to ensure compliance" and for five years Peloton will file annual reports regarding its compliance program and system of internal controls.
Peloton said in a statement it was pleased to have reached this settlement and said "it continues to pursue the CPSC’s approval of a Tread+ rear guard that would further augment its safety features." The company added it "remains deeply committed to the safety and well-being of our members and to the continuous improvement of our products."
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Written By: Reuters
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