Fiat Chrysler in Hot Water for Failing to Report Claims to NHTSA

2015 has been a tough year for auto makers. In July, Fiat Chrysler paid $105 million and agreed to three years of close monitoring to settle charges by the National Highway Traffic Safety Administration (NHTSA) that the company had not met recall requirements. Now, that close scrutiny has revealed the company significantly under reported defect claims to the agency, a mistake that could cost them even more in fines and recalls.

When a customer dies or is hurt because of a car defect, the automaker responsible is supposed to report that claim to the National Highway Traffic Safety Administration. The federal Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act requires each automaker to file a report with NHTSA each month of all such claims, so that the agency can monitor the need for recalls or other compensation.

After Fiat Chrysler agreed to close monitoring in July, 2015, those supervisors noticed "discrepancies" in the company's internal records and the NHTSA reports. Mark Rosekind, NHTSA's administrator, told CNBC.

"FCA [Fiat Chrysler] has informed NHTSA that in investigating that discrepancy, it has found significant under-reported notices and claims of deaths, injuries and other information required as part of the early warning reporting system."

An initial investigation suggests that Fiat Chrysler's systems contained several information gathering and reporting problems that led to the company failing to disclose "significant" numbers of claims. Fiat Chrysler leadership admitted responsibility and is scrambling to comply with the law. A spokesperson told the New York Times:

"F.C.A. promptly notified N.H.T.S.A. of these issues, and committed a thorough investigation, followed by complete remediation."

But the NHTSA says it warned Fiat Chrysler of the discrepancies back in July. Transportation Secretary Anthony Foxx told CNN:

"The news is obviously troubling. . . . NHTSA is still trying to uncover how far back this goes."

 Now the agency is renewing its scrutiny of the company, and the industry. It has promised to investigate Fiat Chrysler's under reporting thoroughly. That means the company could face additional fines and recalls. The NHTSA is also considering an industry-wide meeting to make its expectations clear. Gordon Trowbridge, a spokesman for N.H.T.S.A. told the New York Times:

"After numerous recent lapses in the auto industry, the secretary has determined that a high-level meeting is needed to focus the industry on its health and safety obligations to the public."

The auto industry is tightly regulated because of the risk its consumers take when they get behind the wheel and something isn't right. A vehicle defect can cause serious injury, and even death, if not corrected in time. That's why the NHTSA's early warning reporting is critical. If the auto industry truly cares about its customers, it will do everything it can to work with the agency for their customers' safety and protection.

Dani K. Liblang is a lemon law lawyer at The Liblang Law Firm, P.C. She represents the victims of automobile defects against automakers to get them compensation for their injuries. If you or someone you know has been injured as a result of a defective vehicle, contact The Liblang Law Firm, P.C., today for a free consultation.