Peloton Fined $19 Million for Treadmill Recall

Peloton Interactive Inc. (PTON) is a company that provides interactive fitness solutions. Its products include a bike, treadmill, and app, which all work together to provide users with a personalized fitness experience. The company has seen significant growth in recent years, and its stock price hasreflects this. However, shares have been under pressure recently as the company faces increased competition.

NordicTrack has agreed to pay a $19.1 million civil penalty for its handling of a treadmill recall last year. This is the largest penalty ever imposed by the Consumer Product Safety Commission.

The exercise-equipment maker reached a settlement with the Consumer Product Safety Commission after the watchdog accused the company of failing to immediately report a defect that could cause serious injury.

The CPSC has alleged that, since December 2018, there have been more than 150 reports of people, pets, and objects being pulled underneath the rear of Peloton treadmills. One child has died as a result.

The civil penalty will also settle charges that Peloton distributed recalled treadmills, which violates the Consumer Product Safety Act, the Consumer Product Safety Commission said Thursday.

Peloton has agreed to file annual compliance reports for the next five years as part of the settlement. The payout is not an admission of guilt for the company.

The Commission voted 4-0 to provisionally accept the settlement agreement, the CPSC added. The deal is subject to public comment.

Peloton announced in September that the CPSC planned to seek fines against the company over how it handled the recall.

Last year, the exercise-equipment maker agreed to halt sales and recall the treadmills following reports of dozens of injuries and the death of a 6-year-old child who was pulled under one of the machines.

Peloton initially refused to recall its products when urged to do so by the CPSC. However, the company later reversed its position and apologized for its earlier response.

Peloton has been hit with a penalty as it tries to regain the growth it saw during the pandemic. Sales have dropped 23% in the latest quarter, which is worse than expected. This is due to a lack of demand for Peloton's bikes and other fitness equipment.

After the announcement, shares were trading 2.5% lower at $8.62.Peloton has not yet responded to a request for comment.

CPSC is continuing to rebound from a slowdown in enforcement efforts under the Trump administration.