Honda Pays Biggest Federal Penalty Ever for Underreporting Death, Injury Claims

Jan 08, 2015 05:00 PM EST | Jordan Ecarma

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Honda has agreed to pay a $70 million federal fine for failing to report 1,729 death and injury claims connected with its vehicles to the United States government.

The automaker, which neglected to tell the National Highway Traffic Safety Administration about warranty claims for the faulty cars, today agreed to pay two discrete civil penalties of $35 million, Bloomberg reported.

The first penalty is for the 1,729 death and injury claims that Honda didn't report to the NHTSA from 2003 to 2014, while the second "covers lapses on completely reporting warranty claims and repairs offered under 'customer satisfaction campaigns,'" Bloomberg reported.

Of course, even the $70 million total pales in comparison with Toyota's recent payment of $1.2 billion to settle a criminal probe related to unintended acceleration in some of its vehicles. 

While $35 million is the current maximum fine for automakers, newly installed NHTSA leader Mark Rosekind has said that the penalty threshold needs to be higher.

"Honda and all of the automakers have a safety responsibility they must live up to--no excuses," U.S. Transportation Secretary Anthony Foxx said today in a statement quoted by Bloomberg. "These fines reflect the tough stance we will take against those who violate the law."

The two penalties together surpass the $35 million settlement paid by General Motors, which was the previous NHTSA record for a single company's coverage of a compliance violation.

Federal regulators uncovered Honda's hidden violations late last year while investigating the Takata air bag crisis. In its internal review, Honda blamed "inadvertent data entry or computer programming errors" on the unreported claims and defects.

NHTSA imposed $126 million in fines on auto companies last year, more fines than it had ever before issued in a one-year period. The agency has been cracking down on safety issues after it was criticized for failing to catch problems in GM vehicles that led to at least 42 deaths.

Under the Transportation Recall Enhancement, Accountability and Documentation Act, carmakers will be fined $7,000 per violation each day for not reporting injuries, lawsuits, warranty claims and complaints to federal regulators.

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