Peloton fined $19 million for unsafe treadmills
Peloton agreed to pay a $19 million fine for failing to promptly report treadmill hazards and for distributing recalled treadmills, the Consumer Products Safety Commission said Thursday.
The fine resolves accusations that the company “knowingly failed to immediately report” defects in its Tread+ treadmill to the US regulator, it said in a statement. The civil penalty also settles charges that Peloton distributed recalled treadmills in violation of the Consumer Product Safety Act.
The commission said it imposed “one of the largest civil penalties in our history” due, in part, to the company “distributing recalled products with a fatal defect.” In May 2021, Peloton recalled approximately 125,000 of its Tread+ brand treadmills following the death of a 6-year-old child and dozens of other reports of injuries related to its machines.
But he initially refused to do so despite an “urgent request” from the CPSC in April. Such declines are extremely rare.
In May, then-CEO John Foley said Peloton “made a mistake in our initial response to the CPSC request. We should have engaged more productively with them from the start. For that, I apologize.
The fine, according to the commission, reflected this initial refusal. Peloton had received reports of “entrapment” by its Tread+ treadmills as early as 2018, he said.
“At the time Peloton filed a report with the Commission, there were more than 150 reports of people, pets and/or objects being pulled under the back of the Tread+ treadmill,” according to the commission.
Platoon did not respond immediately to CNN’s request for comment.
The exercise equipment company, which saw phenomenal sales growth during the height of the pandemic, has since faced myriad problems. The company responded with management changes and major reductions in staff and operations.
Shares of Peloton Interactive Inc (PTON) tumbled from a high of around $167 in January 2021 to around $8 in after-hours trading following the CPSC announcement.
– Chris Isidore and Jordan Valinsky also contributed to this story.
If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – at firstname.lastname@example.org The content will be deleted within 24 hours.