Honda to Pay $70 Million for Reporting Error
Chris Welsh, Esq.
The National Highway Traffic Safety Administration (“NHTSA”) demands that Honda pay $70 million for failing to report consumer warranty claims and over 1,700 claims of death and injury through the Early Warning Reporting system, “EWR.”
Although Honda will pay, it has defended that failure to report was due to a data entry glitch. The automaker reportedly learned of the glitch from an NHTSA investigation in late
2011. Fast forward to three years later, Honda still had not corrected the error.
While much of the blame right now is directed at Honda, others criticize that the issue shows a larger systemic problems in the industry, including by the NHTSA, a federal agency. They point out that the agency never followed-up with Honda and waited fine them until three years later (safetyresearch.net). It could have something to do with the fact that 2014 in particular was the greatest year for civil penalties in the agency’s forty-three year history, topping at $126 million (NPR).
This is not the first time consumer advocates have pointed suspiciously at the relationship between regulatory agencies and big auto. There is a considerable party of people that call it too cozy–bending in favor of the auto industry titans.
In a turn of events, big civil penalties have rocked the industry in the last year. Honda faces double the threshold Congress permits NHTSA to fine ($35 million). It will pay $70 million for two separate claims of warranty, the other for death and injury. Advocates are hopeful that the Department of Justice will investigate and fine Honda as well.