Nov. 10, 2011 at 1:21 PM ET
One mystery company really doesn't want you to hear about a complaint that its product allegedly hurt a child.
The unnamed firm has sued the Consumer Product Safety Commission to prevent it from releasing the report to the public as part of a new database of consumer complaints, now available at SaferProducts.gov. It has also asked a federal court in Maryland to seal all court documents related to the case, filed in October.
"This company going to great lengths to keep its name secret," said Scott Michelman, staff attorney at consumer advocacy group Public Citizen. Along with the Consumer Federation of America and Consumers Union, Public Citizen filed an objection with the U.S. District Court in Maryland on Oct. 31, asking that the seal request be denied.
The mystery lawsuit threatens the entire concept of publicly available government complaint data, consumer advocates say.
In March, the Consumer Product Safety Commission launched SaferProducts.gov to make it easy to find consumer complaints about products and services. The site was created as the result of a law passed by Congress in 2008 called the Consumer Product Safety Improvement Act.
For the first time, relatively raw complaints -- not complaints vetted or confirmed by the government agency -- were made public starting in March.
Businesses have 10 business days to respond to each complaint before it's published. But that's not enough for the company involved in the complaint, which involves “an incident that allegedly harmed a child,” according to a report in the Washington Post.
The company involved says the lawsuit must not be made public because doing so would effectively publish the consumer complaint it seeks to quash, according to the Post.
Despite all this mystery, the lawsuit represents an important legal crossroads, Michelman said. If a company can sue to keep a complaint out of public eye, the entire concept behind the public database would be threatened, he said.
"If this company is allowed to keep a report of a potentially hazardous product out, it would effectively undermine a tool that Congress ordered created to protect consumers," he said.
Many raw government consumer complaint databases -- such as complaints filed with the Federal Trade Commission -- are not readily available to the public under the theory that consumers can file incorrect reports that would unfairly besmirch a company. On the other hand, agencies can take months to study complaints before making them public, severely diminishing the usefulness of the information. A Public Citizen report advocating creation of the product safety database, titled “Hazardous Wait,” claimed that government officials waited on average more than 200 days to issue recalls after receiving complaints from consumers.
"If important product safety information is not provided to consumers, they might be subjecting themselves to grave danger, or even death, by buying and using a product about which serious hazards were known and documented, but not told to consumers," Michelman said.
A report issued by the Government Accountability Office in October found that 5,464 complaints had been filed by consumers through SaferProducts.org as of July 7. Only 1,847 were published to the database; many reports weren’t published because they were deemed incomplete, or involved products or services outside the agency’s jurisdiction.
The Internet age has created myriad headaches for companies trying to handle consumer complaints. Popular websites like RipoffReport.com or ConsumerAffairs.com compile thousands of complaints and make them easy for consumers to find. Meanwhile, consumers – or even competitors -- can easily blog, tweet, write Facebook post, or create YouTube videos that unfairly tarnish companies’ products, making it difficult for firms to do damage control.
In this regard Saferproducts.gov is a bit late to the game. Yet product makers worry that, because it is maintained by a government agency, it will have added weight with consumers – and thus have the potential to do greater reputational harm.
In addition to allowing company rebuttals, there is also a procedure for removing demonstrably false reports from the database. And the website includes disclaimers that the information on it has not been verified. But opponents say that’s not enough to prevent unfair damage to companies by inaccurate reports.
Before launch this March, the National Association of Manufacturers was among the most vocal industry groups opposing SaferProducts.gov.
“The (association) believes the rule makes it more difficult for manufacturers to effectively defend their reputations and will not improve product safety for children,” the industry group said on its website in January. “This database has alarmed manufacturers, who fear that it will become a poorly monitored site that encourages reputation-harming complaints.”
Successful suppression of the complaint in the October lawsuit would have far-reaching impacts on any government effort aimed at greater disclosure, Michelman argued. Two similar databases that can publish information detrimental to businesses – accident data logged by the National Highway Traffic Safety Administration and a Food and Drug Administration database on medical devices – could also be undermined by the lawsuit’s success, he said.
“By attacking the statute (that created Saferproducts.org) on some other broad theory, it would keep a lot of complaints out of the public eye,” he said. “We don’t know what the company is arguing, but this and other databases are likely going to be in jeopardy.”
Michelman concedes that inaccurate reports could damage a company’s reputation or product sales, but he said the greater risk involved delaying release a complaint that could protect consumers.
“If false complaints about a product get out, the company can defend itself in the press with advertisements. The real unfairness at stake is the unfairness to consumers if information is not disclosed,” he said. “This is why Congress acted to order creation of this database.”
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