The National Highway and Traffic Safety Administration (NHTSA) recently imposed a $70 million fine against Honda for underreporting crucial information to federal officials. It is the largest civil penalty imposed against an automaker, according to The New York Times.
Knowledge is power for any consumer. If your vehicle has a problem that could result injuries or death, you most definitely want and need to know about it. Government regulators also need to know about the problem so they can set guidelines and ensure automakers are in compliance. Likewise, federal law requires automakers to timely and routinely disclose problems to auto safety regulators, called Early Warning Reporting (EWR). Under the Transportation Recall, Enhancement, Accountability and Documentation (TREAD) Act (2000), manufacturers of 5,000+ vehicles must report to NHTSA any “claims” or “notices” that they have received that “alleges or proves that the death or injury was caused by a possible defect in the manufacturer’s vehicle.” 49 C.F.R. § 579.21(b)(1). The obvious purpose of this requirement is to promote consumer safety.
But from mid-2003 to mid-2014, Honda didn’t report over 1,700 complaints of injuries and deaths, in addition to claims about warranties and customer satisfaction, per NHTSA’s Press Release. NHTSA fined Honda $35 million for violating reporting requirements for injuries and deaths, plus another $35 million for violating reporting requirements for warranties and satisfaction. (Current law limits fines to $35 million per violation, but The Washington Post and The Wall Street Journal report ongoing efforts for Congress to significantly increase this amount.)
What’s troubling is that Honda had reason to know as early as 2011 of its underreporting, but it didn’t disclose to NHTSA until September 2014, according to The New York Times. It’s speculative, but this significant delay may have resulted in higher rates of injuries and other issues. Also, Honda’s troubles may just be beginning - civil lawsuits and even a potential criminal investigation by the U.S. Department of Justice could follow. It remains to be seen how this will impact Honda’s established reputation for popular and reliable vehicles.
There’s no such thing as infallible technology, and the auto industry can’t be held to standards of perfection. But as consumers we should be able to trust our automakers and have peace of mind while on the road. We also need to be informed of crucial information, like potential risks and dangers, so we can make informed decisions. The auto industry owes it to the public to be candid about its products, proactive in preventing and fixing problems, and establishing consumer safety as the number one priority.