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NHTSA Fines Honda $70M for Lapses in Reporting

January 08, 2015



The National Highway Traffic Safety Administration has ordered Honda to pay $70 million in fines for failing to report all deaths, injuries and warranty claims tied to the automaker’s vehicles.

A third-party audit, ordered by federal safety regulators in September, uncovered that Honda under-reported deaths, injuries and warranty claims to NHTSA for 11 years. This was in violation of the Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act, which went into effect in 2000.

In November, Honda admitted that the audit identified 1,729 instances of under-reporting written claims or notices concerning injuries or deaths from July 1, 2003, through June 30, 2014. The automaker attributed the reporting lapses to “various errors, including errors related to data entry and computer coding.”

Questions about Honda’s TREAD Act compliance were initially raised during NHTSA’s investigation of the Takata air bag defects.

The new fine comprises two $35 million civil penalties, NHTSA said. The first penalty is tied to Honda's failure to report 1,729 death and injury claims to NHTSA between 2003 and 2014. The second civil penalty is due to the manufacturer's failure to report certain warranty claims and claims under customer satisfaction campaigns throughout the same time period.

NHTSA, part of the U.S. Department of Transportation, also noted that Honda has agreed to greater oversight and third-party audits “to ensure that all required reporting is completed now and into the future.”

"We have resolved this matter and will move forward to build on the important actions Honda has already taken to address our past shortcomings in early warning reporting," said Rick Schostek, executive vice president of Honda North America Inc. "We continue to fully cooperate with NHTSA to achieve greater transparency and to further enhance our reporting practices."

Honda said it is introducing new training regimens, changing internal reporting policy, making staffing and organizational changes, and enhancing oversight of its early warning reporting process.

Additional details are available in the audit report prepared for Honda by Bowman and Brooke and in Honda's Response to NHTSA's Special Order addressing the violations.

"Today's announcement sends a very clear message to the entire industry that manufacturers have responsibility for the complete and timely reporting of this critical safety information," said NHTSA Administrator Mark Rosekind. "The actions we are requiring will push Honda to significantly raise the bar on the effectiveness of its EWR [early warning reports] reporting program. Our ongoing oversight will ensure compliance and determine if there is cause for additional actions."

In 2014, NHTSA issued more than $126 million in civil penalties, exceeding the total amount the agency had previously collected during its 43-year history. Rosekind, who was sworn in as the safety agency’s new head on Dec. 22, also advocates increasing the current $35 million limit on individual penalties – a change that would require Congressional action.

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