Hyundai Paying $17.35 Million Civil Penalty in Brake Corrosion Case

The automaker will comply with several requirements spelled out in a consent order, including maintaining accurate and current recall information for consumers on its website.

Failing to report a safety defect to NHTSA within five working days, as the National Traffic and Motor Vehicle Safety Act requires, is costing Hyundai dearly. NHTSA announced Aug. 7 that the automaker will pay a $17.35 million civil penalty and comply with NHTSA oversight requirements outlined in a Consent Order because it did not report in a timely manner a safety-related defect affecting 2009-2012 Hyundai Genesis vehicles. The defect involved corrosion in brake system components that can result in reduced braking effectiveness and increase the risk of a crash.

NHTSA determined Hyundai was aware during 2012 that brake fluids in those vehicles did not sufficiently inhibit corrosion. Rather than issuing a recall, the company “instructed dealers to change the brake fluid in affected vehicles without explaining the consequences of failing to change the brake fluid,” according to NHTSA’s news release. “Hyundai also did not inform Genesis owners of the potential safety consequences. Hyundai finally issued a recall of the affected vehicles in October 2013 as a result of a NHTSA investigation. While there have been no fatalities relating to this safety defect, six consumers reported collisions, including two reports of injuries. As of January 14, 2014, Hyundai had received 87 consumer complaints with regard to Genesis vehicles, most of which suggest increased difficulty in braking,” the release states.

The consent order, available via a link at this NHTSA web page, states that Hyundai has established a U.S. Technical Committee to review and decide upon safety recalls and service campaigns and will give that committee all of the information it needs to consider when deciding whether a safety defect exists. Sevearl other requirements are listed, including that Hyundai will maintain accurate and current recall information for consumers on its website; the information will be written in plain English and easily found when searching the Internet. The company has agreed to work collaboratively with NHTSA “to explore creative ways to increase recall response rates.”

"Safety is our top priority, and all automakers should understand that there is no excuse for failing to report a safety-related defect, as required by law," said U.S. Transportation Secretary Anthony Foxx. "This administration will act aggressively and hold automakers accountable when they put the American public at risk."

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