A manufacturer of single-unit air conditioner-heaters whose conduct federal regulators called “illegal, dangerous and unacceptable” has agreed to pay a $5.5 million civil penalty for its failure to recall defective and hazardous units as required by law and for lying to regulators about the number of fires its products had caused.
The U.S. Consumer Product Safety Commission (CPSC) sued that Houston, Texas-based Goodman Company, alleging that it intentionally failed to inform safety regulators immediately that its “packaged terminal air conditioner/heaters contained a dangerous defect that posed an unreasonable risk of serious injury or death to consumers.”
Goodman sold the defective units at Goodman heating and cooling equipment dealers across the U.S. from January 2007 through June 2008 for between $700 and $1,000. The company recalled 233,500 of the air conditioner/heating units.
The CPSC also alleged that when Goodman finally reported the hazard years later, it lied about the number of fires its units had caused. The agency said that Goodman received numerous reports of its air conditioner/heater units overheating, smoking, and catching fire, including three reports of fires that broke out in hotels.
Goodman waited two years to report the serious defect and when it did, company officials identified just three reports of overheating while concealing several other reports of overheating and fires.
Further, after Goodman reported the hazard to the CPSC, it learned of six additional fires involving the same defective units, but also failed to report those as required by law.
“Goodman’s decision to hide information about serious fires for years, while continuing to profit from sales, slowed down the announcement of a recall and put the safety of many families at real risk. CPSC will continue to work closely with the Department of Justice to enforce the law and hold violators accountable.”
In addition to paying a $5.55 million civil penalty, Goodman also agreed to establish and maintain a compliance program designed to ensure it adheres to the Consumer Product Safety Act (CPSA), which is intended to protect the public from unreasonably dangerous products. The company has also agreed to set up and maintain a system of internal controls and procedures.