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Toyota Fined $17.35 Million Over Failure To Properly Report Recalls

December 18, 2012

Toyota Fined $17.35 Million Over Failure To Properly Report Recalls

In the wake of another troubled year of recalls for one of the world’s leading automobile manufacturers, Toyota has agreed to pay a maximum fine of $17.35 million to the National Highway Traffic Safety Administration after it was reported that the company failed to announce a recall in a timely manner earlier this year. The recall in question involves approximately 154,036 2010 Lexus RX 350 and RX 450h vehicles that were targeted over concerns of floor mat pedal entrapment, according to the NHTSA.

Automobile manufacturers ultimately have five business days to report a defect or failure to comply with federal standards to the NHTSA, or else they will face such a penalty. The NHTSA originally contacted Toyota about this potential safety concern in the aforementioned Lexus models in May; however, Toyota didn’t acknowledge 63 alleged reports of entrapment to the NHTSA until the next month. Because of this violation, Toyota was held accountable for the maximum fine under federal law. While the company has agreed to pay the full amount, spokesperson Ray Tanguay, the chief quality officer for Toyota North America contends that this agreement was merely a matter of saving time.

“Toyota is dedicated to the safety of our customers,” he said, “and we continue to strengthen our data collection and evaluation process to ensure we are prepared to take swift action to meet customers’ needs.  We agreed to this settlement in order to avoid a time-consuming dispute and to focus fully on our shared commitment with NHTSA to keep drivers safe.”

This payment comes hot on the heels of the $25.5 million settlement that Toyota issued to its American shareholders in November, connected to the company’s infamous recalls of 2009 and 2010. The shareholders filed a class action lawsuit alleging that Toyota failed to completely disclose the information surrounding those recalls involving unintended acceleration, as they made international headlines. Because of those recalls, Toyota eventually agreed to pay out a total of $48.8 million as a result of three separate investigations, in addition to the most recent class action settlement.

This year hasn’t been one to remember for the makers of some of the world’s most popular vehicles, including the Camry, Corolla and Prius, as Toyota announced the largest worldwide recall in 16 years back in October. That recall involved approximately 2.4 million vehicles in the U.S., as well as another 5 million worldwide, as there were concerns over defective power window switches causing fires.

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