Peloton to pay $19M in fines over dangerous treadmill defect

By ANNE D'INNOCENZIO AP Retail Writer

Exercise equipment maker Peloton Interactive has agreed to pay roughly $19 million in fines related to its delay in reporting a defect for its treadmills that caused one death and multiple injuries, the federal consumer watchdog said Thursday.

The Consumer Product Safety Commission said that the fine resolves the agency's charges that Peloton knowingly failed to immediately report to the Commission as required by law, that its Tread+ treadmill contained a defect that could create a substantial product hazard and created an "unreasonable risk of serious injury to consumers. "

The civil penalty also settles charges that Peloton knowingly distributed recalled treadmills in violation of the Consumer Product Safety Act.

The Commission noted that beginning in December 2018 and continuing into 2019, Peloton received more than 150 reports of incidents where users were pulled under or entrapped. That included the death of a child and 13 injuries, including broken bones, lacerations, abrasions and friction burns.

CPSC said that Peloton didn't immediately report those incidents to the Commission, despite being armed with such information. Peloton and the Commission jointly announced the recall of the Tread+ treadmill on May 5, 2021.

CPSC also charged that after the public announcement of the recall, Peloton knowingly distributed 38 Tread+ recalled treadmills using Peloton personnel and through third-party delivery firms.

As part of the settlement, Peloton is also required to file annual compliance reports for the next five years.

The fines comes as Peloton is struggling to turn around its business after it enjoyed booming sales during the early part of the pandemic when homebound consumers turned to exercise bikes and treadmills in their homes.

Peloton said in a statement that it "remains deeply committed to the safety and well-being of our members and to the continuous improvement of our products." It said that it looks forward to working cooperatively with the CPSC to further enhance member safety.

Peloton noted that it continues to pursue the CPSC's approval of a Tread+ rear guard that would further enhance its safety features.