NEW YORK—Sen. Charles Schumer announced new legislation on Sunday to empower consumers with the knowledge regarding product recalls prior to purchase.
Under the current law, companies are not required to inform customers that the products they are buying are subject to recall or in need of repair. The proposed bill would require sellers to disclose the recall information to customers up front, while creating a publicly accessible online master list of all recalled products.
“Currently countless New Yorkers have purchased Toyotas, Hondas, and other products under recall, and they didn’t even know it,” Schumer said. “You’d think they’d let the customers know, but they don’t. They deliberately sell these defective products.”
Schumer gave an example of this situation with a recent Toyota recall. Toyota recalled 3.8 million vehicles due to an accelerator problem on Sept. 29, 2009, but because the recall was voluntary, the dealers were not required to disclose this information to potential buyers prior to purchase. Last month, on Jan. 21, Toyota recalled another 4.2 million cars.
The senator recounted an incident where a Queens couple was told by a dealership on Jan. 25 that the 2010 Corolla they were looking to lease was not under recall. Toyota then placed stop-sell orders on Jan. 26, after the couple had already signed the lease.
“New York consumers might find it hard to believe, but stores are allowed to sell them something that could be under a recall or in need of a vital repair,” Schumer said. “My bill puts in tough new penalties to make sure New Yorkers know what they are getting into when they make a major purchase.”
Currently, dealers are not required to warn customers of possible problems with products even after recalls are announced—sales are allowed to continue until a stop-sell order is in effect.
The senator said that thousands of new and used products are voluntarily recalled every year, from laptops to baby cribs. Under the proposed bill, it would be considered an unfair trade practice for dealers not to inform their customers up front of any potential risk or recall. Such practices would be enforceable by the Federal Trade Commission (FTC) through federal fines and penalties.
“To be forewarned is to be forearmed when it comes to buying cars, computers, and other products that could be under recall and potentially dangerous,” Schumer said.
The proposed legislation also requires a complete and searchable repository of all products under recall to be easily accessible to the public. No such master list exists at the moment, and although some agencies have partial lists available online, most buyers don’t know where to look.
According to Schumer, the availability of the publicly available online master list will prevent the sellers from stating they did not receive sufficient recall notice, since selling anything on this list will be considered unfair trade.