Money Matters - Simplified

Toyota could face second fine by US regulators

The company has been informed about the first fine, which is $16.4 million, and it has time till April 19 to respond. It is yet not clear whether the automaker will accept the penalty or contest it.

There seems to be no end to the troubles for Toyota Motor Corp. After being levied a record fine of $16.4 million by the US Transport Department, the Tokyo based carmaker may face another penalty.

The Japanese automaker was fined $16.4 million for knowingly suppressing important information related to faulty accelerator pedals in its vehicles, and delaying a massive recall.

Now it may face an additional fine for failing to inform the National Highway Traffic Safety Administration (NHTSA) about the problems with its pedals.

NHTSA report added that the pedals had two separate defects.

Toyota faces fine for risking lives
According to NHTSA, Toyota recalled around 2.3 million vehicles in January but this recall took place almost four month after consumers started complaining that the vehicles had dangerous defects, which led the cars to accelerate unexpectedly.

The company has been informed about the first fine, which is $16.4 million, and it has time till April 19 to respond. It is yet not clear whether the automaker will accept the penalty or contest it.

The agency is also investigating other issues like vehicles’ floor mats, which could have led to sudden acceleration of the vehicles. It is also probing how Toyota handled complaints from the car owners.

Imposing the fine, NHTSA's Chief Counsel O. Kevin Vincent stated that Toyota has risked the lives of “millions of American drivers, passengers and pedestrians” by exposing them “to the dangers of driving with a sticking accelerator pedal."

The U.S. law had allowed the agency to levy a fine of $6,000 for every defective vehicle. In this case the total fine amounted to $13.8 billion. But the law restricts individual fine against the manufacturer, therefore NHTSA could only impose $16.375 million as penalty.

In case Toyota fails to pay the fine, the matter will be referred to U.S. Department of Justice, Vincent added.

NHTSA probing other issues
If NHTSA decides that the problem with the pedals as two separate defects, Toyota will definitely be notified about the second fine.

The agency is also investigating other issues like vehicles’ floor mats, which could have led to sudden acceleration of the vehicles. It is also probing how Toyota handled complaints from the car owners.

Each of these issues could lead to a separate fine against the Japanese automaker.

Till now, the largest fine has been $1 million, which was against General Motors. The automaker was charged for failing to timely recall windshield wipers in its 581,344 Trailblazers, Bravadas, Envoys, and Isuzu Ascenders, which were manufactured in 2002-2003.