Peloton fined $19 million by CPSC in fatal treadmill accident

Peloton fined $19 million by CPSC in fatal treadmill accident
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Peloton has agreed to pay a $19 million fine for failing to alert federal safety regulators to problems with its treadmills that were linked to the death of a 6-year-old boy and at least a dozen injuries, authorities said Thursday. it is between highest civil penalties in the history of the Consumer Product Safety Commission.

Peloton, the home exercise company that was a darling of the lockdown economy, accepted the fine to settle allegations related to a series of accidents that culminated in the boy’s death in 2021.

“Peloton remains deeply committed to the safety and well-being of our members and to the continuous improvement of our products,” company spokesman Ben Boyd said in a statement, adding that the company was “pleased to have reached this conciliation agreement.

The accidents involved people being swept under the company’s high-end Tread Plus treadmill. In addition to the one fatality, there were reports of broken bones and deep cuts.

Peloton finally recalled its Tread Plus treadmills in May 2021, a move it had bitterly fought with regulators over, leading to a rare public battle of words and apology from Peloton’s then-CEO.

“We made a mistake in our response,” John Foley said during an earnings call at the time.

The recall came near the start of a long difficult period for Peloton, as demand for its stationary bikes and treadmills plummeted as coronavirus pandemic lockdowns eased. That it eliminated thousands of jobs, along with more than half the price of its shares. Foley, who co-founded Peloton, stepped down as chief executive in September.

In November, Peloton reported that it was still fighting to change the internet-connected fitness empire that at one time defined the pandemic stay-at-home experience for millions of Americans.

Peloton first learned of the problems with its treadmills in late 2018 and, instead of notifying safety regulators, relocated warning labels to the rear of its treadmills where the entrapments occurred, according to the deal.

The company also discussed the feasibility of a design change to add rear protection before the boy died in March 2021, according to the agreement.

But Peloton didn’t notify CPSC of the problems until a day after the fatal incident.

By then, the company knew of more than 150 reports of people, pets and objects being sucked into its treadmills, according to the settlement.

squad at the start was not willing to voluntarily remove the treadmills, prompting the CPSC to take the rare step of issuing its own warning to the public to stop using the exercise machines. Peloton responded with a statement refuting the CPSC’s claims. The company eventually backed out.

The CPSC is increasingly willing to punish companies with civil penalties. In July, Vornado Air agreed to a $7.5 million fine for issues related to its space heater fire. TJX Companies, the parent company of retailers TJ Maxx, Marshalls and HomeGoods, agreed to a $13 million fine in August for knowingly selling recalled products.

Peloton’s fine dwarfs both, but falls short of the $27.5 million paid by Polaris Industries in 2018 for failing to report defective ATVs.

CPSC’s agreement with Peloton was approved by a 4-0 vote of agency commissioners.

“When a company continues to sell dangerous products that it knows can cause serious injury or death, it must be held accountable,” CPSC Chairman Alexander Hoehn-Saric said in a statement.

Peloton hasn’t given up on its Tread Plus treadmill.

Boyd, the company spokesman, said he is still trying to get CPSC approval for a rear guard, a sign the treadmill could be back on the market.

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