How many of you have ever heard of the term “silent recalls” as it relates to the automobile industry? Unless you have had a safety issue with a vehicle and took it to a dealer, and were involved with a silent recall, I doubt you are aware of what a silent recall is or how one works. I will give you some history of how silent recalls have been used, but first let’s look at a recent situation. The Chevrolet Volt has had just one recall since its introduction four years ago. The problem, a faulty brake valve that affected just four cars, made it one of the smallest recalls in history. But it appears that General Motors (GM) has fixed other problems on thousands of Volts for free through at least eight customer-satisfaction campaigns, which are less public than recalls and largely unregulated.
The repairs included reinforcing the battery pack and improving the battery coolant system after a government crash test sparked a widely publicized fire, prompting a congressional hearing and an investigation by the National Highway Traffic Safety Administration (NHTSA). Because neither GM nor the regulatory agency determined that the fire was evidence of a safety defect, the automaker didn’t have to use the word “recall,” follow specific requirements for notifying customers or report how many Volts got fixed.
In these customer-satisfaction campaigns, sometimes called “secret warranties” or “silent recalls” consumers aren’t notified about them. They are used frequently by the automobile industry – not just at GM – and often times safety issues are involved. As complex technology leads to more unforeseen problems after a vehicle goes on sale these techniques may well increase.
But it should be noted that the automakers have been using silent recalls for years. Lawyers in our firm first learned of silent recalls in a case we handled several years ago, Johnson vs. General Motors. That case involved a new pick-up truck that stalled in an intersection and was hit broadside by a log truck. A small child was killed in the crash. We tried the case and got a $15 million verdict after a lengthy trial. During the pre-trial discovery we learned that GM was using silent recalls to hide serious safety problems from the public. The automaker had been getting complaints in the hundreds of vehicles stalling, but did not issue a real recall. Instead, GM notified dealers and told them to fix the computer if a customer came in with the problem. The automaker also told the dealers to try and get the customers to pay and if they refused GM would pick up the tab.
Huge recalls recently by GM and Toyota Motor Corp. raise questions about whether dangerous problems could be hidden in little-noticed service bulletins or customer-satisfaction campaigns, which aren’t supposed to be used for safety-related defects. Gabriel Shenhar, a senior auto test engineer with Consumer Reports, stated:
There’s a ton of stuff that goes under the radar screen in the form of technical service bulletins and goodwill campaigns and customer-service campaigns and hidden warranties. It’s to the benefit of the consumer to have it done as a recall, so it doesn’t go under the radar screen.
Clarence Ditlow, executive director of the Center for Auto Safety said: “[t]here is not a sharp line between a service campaign and safety recall.” He said the $1.2 billion penalty imposed on Toyota this year over its unintended-acceleration crisis, multiple ongoing investigations of GM’s ignition recalls and greater scrutiny by regulators may compel automakers to use recalls for cases in which they might have acted with less urgency in the past. He added:
If you’re looking at a billion-dollar fine, it changes your calculus. I think we’re going to see more safety recalls and fewer service campaigns, but the service campaign is never going to go away.
I believe that the silent recalls are used for two reasons. One definitely is based on cost to the automaker, with the other being an attempt by the automaker to keep a known defect “secret,” keeping both the public and NHTSA in the dark. The automakers will take a different view on this, but that view won’t pass the “smell test.” In the Johnson case that we handled, even though General Motors had received hundreds of complaints of stalling vehicles, it never had any intention of telling either NHTSA or the public about the hazard caused by the computer-related safety defect. In that case suppliers had furnished defective computer chips. GM used the silent recall effectively until we discovered it in our case.
Documents filed by GM show that at least six of its 65 recalls this year relate to previous, lesser field actions. At least two other recalls initially were proposed to be customer-satisfaction campaigns, but got upgraded by the executives who approve them. A top NHTSA official criticized GM in a 2013 email, which Congress released publicly in April, for repeatedly using customer-satisfaction campaigns and service bulletins to address matters the agency deemed to be safety defects. Automakers frequently have created customer-satisfaction campaigns or extended warranties in response to NHTSA investigations. That often has been enough to satisfy NHTSA so its staff can move on to examine other complaints. In August, NHTSA closed an investigation into braking issues on 100,000 Toyota Camry hybrids after Toyota said it would offer extended-warranty coverage.
In March, NHTSA closed its inquiry of 1.6 million Ford Escapes, Fusions and other vehicles after Ford Motor Co. started a customer-satisfaction campaign for engine throttle-body problems that generated nearly 12,000 complaints. Last year, the agency closed an investigation into sticky accelerators after Ford agreed to a campaign covering throttle cables on nearly half a million Taurus and Mercury Sable sedans. After GM offered Volt owners several “enhancements” in response to NHTSA’s probe into the 2011 crash-test fire, regulators concluded that “further investigation does not appear to be warranted.” But it added this disclaimer, which it also used for the Camry hybrid and Ford throttle-body investigations: “The closing of this investigation does not constitute a finding by NHTSA that a safety-related defect does not exist.”
Having said all of this, the bottom line is that silent recalls – falling short of a true recall – are not consumer friendly. In my opinion, when a defect is related to safety in any respect they should be prohibited.
Source: National Highway Traffic Safety Administration
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.