Major automakers misreporting car defects to NHTSA

Channel 2 learned early warning reporting system doesn't work

By Joel Eisenbaum - Investigative Reporter

HOUSTON - Some of the world's largest automakers are misreporting and under reporting consumer complaints about safety defects to the federal government.

'"It's a money savings issue if they don't report everything," said Michael Brooks of the Center for Auto Safety.

Since 2003, car manufacturers have been required by law to inform the National Highway Traffic Safety Administration about claims of car defects made by consumers, including formal written complaints, informal letters, lawsuits and warranty claims.

Automakers must forward the vast majority of accusations about deficiencies related to their products -- from broken ashtrays to malfunctioning airbags -- to the federal government on a quarterly basis. Early warning reporting is designed to be a key metric in deciding which cars and trucks should be subject to mandatory recalls.

But Channel 2 has learned the system doesn't work.

A government audit found the government is ill-equipped to manage such a system.

On the other side of the equation, several big-name automakers are not complying with federal regulations. Honda and Chrysler were recently fined $70 million each by the Department of Transportation for failing to forward consumer complaints to NHTSA.

Honda's civil penalty is due to failure to report 1,729 death and injury claims to the NHTSA between 2003 and 2014.

Fiat Chrysler America acknowledged significant failures in early warning reporting dating back to the beginning of the mandatory program in 2003.

But the second largest automaker in the world since the program began has reported far fewer defect complaints than both Honda and Fiat. Volkswagen, a car company currently dealing with an emissions scandal, has not been fined for under reporting, but Channel 2 Investigates found that over four randomly chosen quarters between 2010 and 2015, Volkswagen reported 11 times fewer consumer defect complaints than Honda and 17 times fewer defect complaints involving death and injury than Chrysler.

General Motors' defect rate statistics were nearly 100 times higher than Volkswagen's.

Channel 2 Investigates also found a 2005 civil suit alleging defect and injury against Volkswagen, in Houston that our team could not find in Volkswagen's early warning database submitted to the NHTSA.

"Volkswagen's statistics are so far out of the norm of whatever the other car manufacturers are reporting," said Jim Adler, a personal injury attorney.

Adler, who makes a living suing car companies, said he’s found the early warning system doesn’t work as designed.

Channel 2 asked Volkswagen about the accuracy of its reporting.

"Volkswagen Group of America, in coordination with the National Highway Traffic Safety Administration, is undertaking a third party audit of its Early Warning (or TREAD) Reporting and associated processes,"  Volkswagen Senior Manager of Corporate and Internatal Communications Jeannine Ginivan said in a statement. "VWGoA will make the findings of the audit available to NHTSA and will work with the agency to act on any recommendations. We are unable to comment on specific cases."

In a recent press conference, NHTSA and several automakers pledged to do a better job of following the law and monitoring early warning reporting.

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