Archive for Costco loses civil suit

Costco To Pay $3.85 Million for Dangerous Trash Cans

The United States Consumer Product Safety Commission (CPSC) is an agency that independently seeks to promote consumer safety. It achieves this by addressing injury from risks through coordination of recalls, evaluation of consumer products that are reported as wanting by industries or consumers, development of uniform standards, and research into injuries and illnesses that are product-related.

The CPSC stated that Costco Wholesale Corporation agreed to pay a fine of $3.85 million after it lost in a civil suit against its EKO Trash Cans. The staff at the company charged that the organization failed to file a report with the CPSC, in compliance with the law with regard to the safety of the EKO Sensible Eco Living Trash Cans.

The staff asserted that the trash cans were a safety hazard to consumers. To be more precise, the plastic protective layer that is at the back of the trash can receptacle can be disconnected easily thus exposing a sharp edge. The sharp edge is a hazard to consumers as it can cause lacerations to the user. The company had received complaints from consumers, 60 to be exact, on injuries they had sustained from the cans. There were also an additional 92 complaints about the company’s Eko trash cans but Costco did not immediately report to CPSC on the risk or defect.

It was not until July 17th, 2015 that Costco took action by recalling 367,000 trash cans from the market. By that time, the company had made sales for close to two years; December 2013 to May 2015.

Other than paying the penalty, Costco has decided to maintain a program that will help it achieve business compliance to the CSPC Act as well as established internal procedures and controls system. These will ensure that Costco gives full disclosure to CSPC of information related to its products and which is in accordance with the law.

Although Costco has agreed to pay the $3.85 million civil penalties, it does not admit to the charges lodged against it by its employees.

Civil lawsuits from dissatisfied customers are not new to Costco. In April this year, the company was faced with a class action lawsuit for withholding a percentage of refund money for store memberships that had been canceled.