Peloton has agreed to pay a $19 million fine to settle a CPSC charge that the fitness equipment company failed to immediately report a defect in one of its treadmills, resulting in more than a dozen injuries and a child’s death, the CPSC announced Thursday.
According to the CPSC, Peloton began receiving reports of customers being pulled under and entrapped near the back of its Tread+ Treadmill in 2018 and 2019, but failed to report the incidents to the commission as required by law.
The product was eventually recalled in May 2021, but the CPSC charged Peloton with breaking the law by knowingly distributing dozens of the recalled treadmills. This claim was also settled on Thursday.
According to the CPSC, Peloton became aware of the defect in 2018.
In 2018 and 2019, the New York-based company became aware of incidents in which customers were pulled under from the treadmill’s rear and worked to relocate a warning label near the danger area. According to the settlement agreement, it also considered adding a rear guard to the product.
Nonetheless, the settlement stated that Peloton did not report the incidents to the commission.
Peloton learned in March 2021 that a six-year-old had died after becoming entrapped in the treadmill. A day later, Peloton notified the commission of the incident, but the CPSC had already received 150 reports of the product’s defect at that point.
The commission stated that it had to subpoena Peloton in order to obtain information about the reports, including injuries ranging from bruising to lacerations and broken bones.
Peloton later agreed to recall the product voluntarily in April 2021. According to the settlement, the recall was announced the following month.
Peloton treadmill settlement terms
Peloton agreed to pay $16,025,000 for failing to report the incidents in a timely manner, as well as $3,040,000 for distributing recalled products. The fine is $19,065,000 in total.
The settlement agreement also requires Pelton to maintain a programme to ensure CPSC compliance.
Peloton acknowledges no wrongdoing.
Peloton admitted no wrongdoing and settled “to avoid the cost, distraction, delay, uncertainty, and inconvenience of protracted litigation or other proceedings,” according to the settlement.
According to the commission, its members voted on December 28 to accept the settlement agreement, pending public comment.
A request from USA TODAY for comment on the settlement to Peloton was not immediately returned Thursday.