Peloton fined $28m for death of child, injuries
By Todd C. Frankel
Peloton has agreed to pay a $US19 million ($27.8 million) fine for failing to alert federal safety regulators to problems with its treadmills that were tied to the death of a 6-year-old and at least a dozen injuries, officials said Thursday. It’s among the largest civil penalties in the Consumer Product Safety Commission’s history.
Peloton – the in-home exercise company that was a high flying darling of the lockdown economy – agreed to the fine to settle allegations related to a series of accidents that culminated in the child’s death in 2021.
“Peloton remains deeply committed to the safety and well-being of our Members and to the continuous improvement of our products,” company spokesperson Ben Boyd said in a statement, adding that the company was “pleased to have reached this settlement agreement.”
The accidents involved people being pulled under the company’s high-end Tread Plus treadmill. In addition to the one death, there were reports of broken bones and deep cuts.
Peloton eventually recalled its Tread Plus treadmills in May 2021, a move that it had bitterly fought over with regulators – leading to an unusually public battle of words and apology from Peloton’s then-chief executive.
“We made a mistake in our response,” John Foley said during an earnings call at the time.
The recall occurred near the start of a long rough period for Peloton, as demand for its stationary bikes and treadmills plummeted as coronavirus pandemic shutdowns eased. It shed thousands of jobs, along with more than half of its stock price. Foley, who co-founded Peloton, resigned from his chief executive role in September.
“We made a mistake in our response.”
John Foley, former CEO Peloton
In November, Peloton reported it was still struggling to turn around the internet-connected fitness empire that at one point defined the stuck-at-home pandemic experience for millions of Americans.
Peloton first learned about problems with its treadmills in late 2018 and, rather than notifying safety regulators, moved to relocate warnings labels to the rear of its treadmills where the entrapments took place, according to the settlement.
The company also looked at the feasibility of a design change to add a rear guard before the child died in March 2021, the settlement said.
But Peloton didn’t notify the CPSC about the problems until one day after the fatal incident.
By then, the company knew about more than 150 reports of people, pets and objects being sucked under its treadmills, the settlement said.
Peloton at first was unwilling to voluntarily recall the treadmills, leading the CPSC to take the rare move of issuing its own warning to the public to stop using the fitness machines. Peloton responded with a statement rebutting the CPSC’s claims. The company eventually backed down.
The CPSC has become increasingly willing to slap firms with civil penalties. In July, Vornado Air agreed to a $US7.5 million fine for issues related to its space heaters catching fire. TJX Companies – the parent company of retailers TJ Maxx, Marshalls and HomeGoods – agreed to a $US13 million penalty in August for knowingly selling recalled products.
The Peloton fine dwarfs both of those but is shy of the $US27.5 million paid by Polaris Industries in 2018 for failing to report defective off-road vehicles.
The CPSC’s settlement with Peloton was approved by a vote of 4-0 by the agency’s commissioners.
“When a company continues to sell dangerous products that they know can cause serious injury or death, it must be held accountable,” CPSC Chair Alexander Hoehn-Saric said in a statement.
Peloton has not given up on its Tread Plus treadmill.
Boyd, the company spokesman, said it’s still tying to get the CPSC’s approval for a rear guard – a sign that the treadmill could return to market.
Washington Post
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