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Toyota Pays for Late Recalls

prius2The U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA) announced that Toyota Motor Corporation has agreed to pay $17.35 million, the maximum fine allowable under the law, in response to the agency's assertion that the automaker failed to report a safety defect to the federal government in a timely manner. This action represents the single highest civil penalty amount ever paid to NHTSA for violations stemming from a recall.

Federal law requires all auto manufacturers to notify NHTSA within five business days of determining that a safety defect exists or that the vehicle is not in compliance with federal motor vehicle safety standards and to promptly conduct a recall.

In early 2012, NHTSA's Office of Defects Investigation began noticing a trend in floor mat pedal entrapment in 2010 Lexus RX 350s in Vehicle Owner Questionnaires (VOQs) and Early Warning Reporting data. In May, NHTSA contacted Toyota regarding the trend, and a month later Toyota advised NHTSA that it was aware of 63 alleged incidents of possible floor mat pedal entrapment in Model Year 2010 Lexus RX 350s since 2009. Toyota's own technicians and dealer technicians reported that certain alleged incidents of unwanted acceleration had been caused by floor mat pedal entrapment.

In June, Toyota advised NHTSA that it would conduct a recall of 154,036 Model Year 2010 Lexus RX 350 and Model Year 2010 RX 450h vehicles to address floor mat pedal entrapment.

As part of the settlement, Toyota and its U.S. based subsidiaries agreed to make internal changes to their quality assurance and review of safety-related issues in the United States, and to improve their ability to take into account the possible consequences of potential safety-related defects.

The last time Toyota faced civil penalties was in 2010 when the automaker agreed to pay $48.8 million as a result of three separate investigations into the automaker's handling of auto recalls. The automaker paid maximum civil penalties for violations stemming from the pedal entrapment, sticky pedal and steering relay rod recalls.