CPSC Urged to Enhance Recall Effectiveness

Consumer and product safety organizations are calling on the U.S. Consumer Product Safety Commission (CPSC) to adopt a number of proposals to enhance recall effectiveness and to encourage consumers to remove dangerous products from their homes. In comments submitted to the CPSC earlier this month, CFA, Public Citizen, Kids in Danger (KID), Consumers Union, Consumer Reports, and U.S. PIRG urged the agency to improve communications with the public, adopt more robust approaches to outreach, incentivize consumer responsiveness to recalls, get input from technology and marketing experts, work to receive better data, and formalize the definition of a successful recall.

“We suspect, with few exceptions, that most consumers who own a recalled consumer product never find out about the recall,” wrote the groups. “Even some high-profile recent recalls, such as that of IKEA dressers, have yielded extremely low rates of action taken by consumers. The CPSC must work hard with consumer advocates, manufacturers, and the public to assess how to increase the effectiveness of recalls and how to effectively warn the public about dangerous products.”

According to a 2018 KID report on recall effectiveness, CPSC issued 280 recalls in the 2017 calendar year, which is the lowest number of recalls since 2008 – the year Congress passed groundbreaking product safety reforms in the Consumer Product Safety Improvement Act (CPSIA).

At a July 2017 recall effectiveness workshop held by the CPSC, CPSC staff noted that the average rates at which consumers participate in corrective actions are quite low: around 6% for all product types, with rates ranging from about 4% for products with a retail price of less than $20 to about 32% for products with a retail price of $10,000 or more. “This is unacceptable, given that lives are at risk, and it stands in contrast to comparatively higher correction rates along other points in the supply chain,” the groups stated.

The groups noted that the current reliance on physical product registration cards to alert consumers to recalls is ineffective, in part because the law only requires manufacturers of durable infant and toddler products to offer such cards. It is also unrealistic to expect that people in today’s increasingly electronic age will complete and mail back a physical registration card, they argued. “It is vital that the CPSC make full use of its authority – and recommend any statutory changes that may be needed – to harness technology and better ensure that products get registered,” they suggested.

While many companies use social media to inform customers of new products and occasionally product recalls, the chance of a consumer finding out about a recall via these platforms is slim, the groups explained. “The onus must be on the manufacturer to find the best way reach consumers, and not the other way around. Electronic outreach must be more robust, including by using a variety of direct notification tools and engaging influencers on social media.”

In addition to the need for companies to be proactive in preparing and carrying out recall campaigns, the CPSC must be willing to hold companies accountable through fines, consent decrees and other agreements, they wrote. The comments offer support for the CPSC’s use of its civil penalties authority to the fullest extent under the law, as warranted, and urge the agency not to hesitate to levy such fines.

These recommendations are just some of the needed fixes to ensure greater recall effectiveness, they concluded. “We urge the CPSC to bolster companies’ implementation of recalls, use the most modern communication and outreach tools available, and draw on expert research on consumer behavior to help ensure recalled products are removed from use.”

Privacy is Critical to Competition, Groups Tell FTC

In comments submitted to the Federal Trade Commission (FTC) last month, CFA, the Electronic Privacy Information Center, Center for Digital Democracy, and U.S. Public Interest Research Group explained why privacy is critical to the FTC’s mission of promoting competition.

A handful of technology companies now assert unprecedented control over the digital economy, the groups explained. “Google accounts for 90 percent of all Internet searches in the United States. 66 percent of smartphone users rely on Google’s Android operating system. Apple and Google together provide the software for 99 percent of all smartphones. Meanwhile, Facebook controls 77 percent of mobile social networking traffic in the United States. Google and Facebook achieved their dominance through unrivaled access to consumer data.”

The groups called on the Commission to take five steps to promote competition, innovation, and consumer privacy:

1. Reverse the approval of Facebook’s acquisition of WhatsApp;
2. Require Google and Facebook to spin off their advertising units into independent companies;
3. Block all future acquisitions by Facebook and Google that would enable the companies to increase their access to consumer data;
4. Impose privacy safeguards for all future mergers that implicate data privacy concerns;
5. Perform audits of algorithmic tools as well as human rights, social, economic and ethical impact assessments for companies under consent order to guard against anticompetitive conduct and other negative consequences.

“Over the past twenty years, the growing concentration among the dominant technology firms in the United States has eroded consumer privacy and stifled innovation,” the groups wrote. “The FTC’s failure to protect privacy in its merger review process has contributed greatly to the decline in competition among the digital platforms in the US. The dominant digital platforms regularly abuse their access to consumer data to undermine competitors and hinder the development of innovative, privacy-enhancing technologies. Placing meaningful limits on the dominant firms’ data collection practices can level the playing field and allow new, innovative products to enter the market, benefiting consumers and the American economy.”

Report on Auto Insurance Affordability Shows Pro-Industry Bias

Consumer groups have called on state insurance regulators to reject a proposed report on auto insurance affordability that the groups said is biased toward industry and fundamentally flawed. After several requests by consumer groups to review the insurance data provided for a planned National Association of Insurance Commissioners (NAIC) report were rebuffed by the NAIC, the groups have told commissioners that the report will not serve the public interest and the NAIC should start over.

“The proposed ‘report’ serves no purpose other than that intended by the insurance industry when it dictated that only data hand-picked by industry itself would be used in the study,” CFA, Center for Economic Justice, and Consumers Union stated in a joint comment letter submitted to the NAIC earlier this month.

After years of stalling, the groups explained in a recent news release, the Working Group appeared to make progress in 2017 when a draft data call was developed by NAIC staff and several state regulators that aimed to collect a useful and comprehensive data set for analysis of the affordability problem. However, in the days before the data call was set to be adopted by the NAIC, the insurance industry offered an alternative data collection approach, in which industry-affiliated entities would, instead, provide a far more limited set of data that would be controlled by industry and held from public view.

Consumer groups protested that this last minute substitution did not include relevant data, was biased due to the source of the data, and would not provide for a meaningful assessment of auto insurance affordability, let alone a path toward addressing affordability problems. Over the next several months, consumer groups requested to review the data several times but those requests have been rejected by NAIC leadership. Instead, the NAIC has deferred to the insurance industry preference that the data only be seen by insurance companies, regulators, and NAIC staff.

“The failure of state insurance commissioners to provide unbiased and timely research to protect their most vulnerable citizens is why the Federal Insurance Office must step in and conduct the affordability research as it has in the past,” said CFA Director of Insurance J. Robert Hunter.

Safe Food Coalition Cries Foul on Defunct Microbiological Testing

With Campylobacter causing more illness than any other foodborne pathogen in 2017, and documented cases of illness rising by 10% compared to preceding years, members of the Safe Food Coalition have called on the U.S. Department of Agriculture (USDA) to take swift action to protect consumers from poultry contaminated with Campylobacter.

Officials with USDA’s Food Safety and Inspection Service (FSIS) recently revealed that changes in the Campylobacter testing methodology have prevented the agency from detecting the vast majority of positive samples. In a letter to Secretary of Agriculture Perdue last month, CFA and its allies urged Secretary Perdue to announce a firm deadline for the development of new tests and standards, to adopt common sense interim measures to improve existing testing, and to publish which companies have excessive levels of contamination, similar to what the agency does for Salmonella.

Most Campylobacter infections originate with the handling and consumption of raw poultry, Thomas Gremillion, Director of the CFA Food Policy Institute explained. The bacterium sickens an estimated 1.3 million people every year, with many patients developing life-threatening bloodstream infections, long-term consequences including irritable bowel syndrome and arthritis, or even paralysis. Yet the cases are rarely part of a recognized outbreak. As a result, food producers associated with these infections often remain unaware, and unaccountable.

“FSIS has a critical role to play in protecting consumers from Campylobacter,” the groups stated in their comment letter. “Without effective agency action, the problem could get worse.”

In order to protect consumers, they called on FSIS to adopt more effective standards and verification testing in a timely fashion, maintain current verification testing in the interim to incentivize plants to invest in better food safety controls, and end the agency’s indefinite moratorium on web-posting Campylobacter category data.

“The current test results, despite their limitations, should guide buyers and the public that value food safety, and help the market to operate more efficiently in creating incentives for higher quality, safer products,” the Coalition concluded.