Honda To Pay $70M For Under-Reporting Injury Claims

Updated on

Auto giant Honda’s U.S. subsidiary agreed to pay $70 million in fines after failing to tell the United States government about warranty claims. It also failed to government about over 1,700 injuries and deaths resulting from possible care defects.

Honda’s violation of NHTSA laws taken seriously

By law, car makers are required by U.S. law to report this kind of information. American Honda’s violation possibly also interfered with the National Highway Traffic Safety Administration’s ability to identify problems with vehicles. Anthony Foxx (secretary for U.S. Transportation) explains, “Honda and all of the automakers have a safety responsibility they must live up to — no excuses. These fines reflect the tough stance we will take against those who violate the law.”

The car maker’s violations first came to light late last year when the investigation into a global crisis involving defective airbags. It was this issue that prompted the government to question the diligence of some car makers on whether or not they would alert the government. Honda’s eight missing reports involved ruptures in the air bags. Honda claimed this was something the NHTSA already knew.

Honda blames data entry errors

A synopsis of one internal review filed with NHTSA, Honda placed blame on data entry errors or inadverdent actions. The penalties include two separate fines of $35 million . The first fine covers the auto maker’s failure to report 1,729 injury and death claims, the second fine covers the lapses of complete claim reports. The combined penalty surpasses previous records of compliance violations from a single company.Another part of the agreement involves Honda revising regulatory compliance orders, improving personnel training, and completing at least two external audits on data reporting.

2014 was also a record year for the NHTSA as it issued a grand total of $126 million fines. Its evident the agency is coming down hard on companies that don’t comply with the rules. Judging by this latest move, it doesn’t appear it will slow down anytime soon.

Leave a Comment

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!