Release Date: March 25, 2016
Release Number: 16-127
Gree Agrees to Pay Record $15.45 Million Civil Penalty, Improve Internal Compliance for Failure to Report Defective Dehumidifiers
WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission (CPSC) announced today that Gree Electric Appliances Inc., of Zhuhai, China; Hong Kong Gree Electric Appliances Sales Co. Ltd., of Hong Kong; and Gree USA Sales Ltd., of City of Industry, Calif., have agreed to pay a $15.45 million civil penalty to the government.
The penalty settles charges that Gree:
• knowingly failed to report a defect and unreasonable risk of serious injury to CPSC immediately (within 24 hours) with dehumidifiers sold under 13 different brand names, including Frigidaire, GE, Gree, Kenmore and Soleus Air
, as required by federal law;
• knowingly made misrepresentations to CPSC staff during its investigation; and
• sold dehumidifiers bearing the UL safety certification mark knowing that the dehumidifiers did not meet UL flammability standards.
Gree’s dehumidifiers had a defect that caused the machines to overheat and catch fire. Despite Gree receiving multiple reports of incidents, and despite making design changes to fix the problem, Gree failed to report the defect to CPSC immediately. Gree also failed to report the incidents or the design changes to CPSC immediately. These incidents began in July 2012 and caused nearly $4.5 million in property damage.
The dehumidifiers were eventually recalled in September 2013. The recall was expanded in January 2014, and reannounced in May 2014. Gree manufactured, imported and sold more than 2.5 million units nationwide. The humidifiers were sold by AAFES, HH Gregg, Home Depot, Kmart, Lowe’s, Menards, Mills Fleet Farm, Sam’s Club, Sears, Walmart and other stores nationwide and in Canada, and online at Amazon.com and Ebay.com, from January 2005 through August 2013 for $110 to $400.