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Mercedes-Benz Fined for Mishandling Recalls

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The United States division of Mercedes-Benz will pay up to $20 million in fines for failing to handle recalls according to the standard procedure ordered by the National Highway Traffic Safety Administration.

According to a settlement signed by the agency, the company failed to properly handle dozens of recalls recommended by the NHTSA. The recalls in question are part of a year-long investigation conducted by the NHTSA on vehicles from the 2016 to 2018 model years where it identified the automaker for several federal violations such as being late in mailing recall notification to owners and omitting critical information in its filings.

The settlement stated that in the 101 recalls made by Mercedes-Benz between 2016 and 2018, roughly 40 percent were out of compliance.

Mercedes-Benz is being required to pay $13 million upfront, with an additional $7 million of hanging fines if the agency determines that the company is delaying or failing to improve its recall processes. For the next two years, Mercedes-Benz will also be audited by the NHTSA.

The settlement also stated that in the 101 recalls made by the automaker between 2016 and 2018, roughly 40 percent were out of compliance. Mercedes was found to have notified its customers beyond the 60-day limit (even up to as long as 80 days after filing in some cases), failed to submit recall notifications to the NHTSA within five days, was late in submitting quarterly reports, failed to update the agency on the scheduled beginning of the repairs, failed to report a defect to NHTSA within five days, and had persistent problems with its VIN lookup tool.

But considering other fines slapped by the NHTSA on other automakers for violating standard recall procedures in the past years, the $20 million fine on Mercedes-Benz is arguably small. In 2015, the agency fined Honda $70 million for missing safety data, while Fiat Chrysler was fined $140 million. Under federal law, the NHTSA is authorized to fine automakers up to $21,000 per day for violating the Federal Motor Vehicle Safety Standards.

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