BulletProofBlog the blog on crisis communications

It's happening just as predicted. Federal regulators are keeping their promise to levy massive penalties against companies that violate the new Consumer Product Safety Improvement Act, which Congress passed last year in response to the tsunami of food, toy, and consumer product recalls in 2007.

The Consumer Product Safety Commission (CPSC) has announced that toy maker Mattel Inc. and its Fisher-Price subsidiary must pay a $2.3 million civil penalty to settle allegations that they knowingly imported and sold up to two million children's toys that violated the federal lead-paint limit. It' s the commission' s highest toy-related penalty ever.

While the large fine imposed on Mattel is painful, the lasting damage is to the toymaker' s brand, which is again being pounded in headlines and serving as a stark reminder of the lead paint issue as parents stroll down the toy aisle at WalMart, Target, or Toys ‘R Us.

The CPSC, empowered by the Consumer Product Safety Improvement Act, has promised more actions against toymakers and other consumer product manufacturers in the months to come. Under the new law, whistleblower protections are enhanced, criminal and civil penalties are amplified, and all 50 state attorneys general now possess the power to attack companies they perceive to be in violation of CPSC standards.

But what may be the most daunting element of the new law is a provision requiring the CPSC to investigate the effectiveness of a recall itself. Companies are going to be increasingly held responsible for ensuring that recalled products come off the shelves in a timely manner and that consumers who have already purchased a faulty product return it as soon as possible. This adds a layer of complexity not only in terms of collecting, storing, and destroying faulty products, but it also creates a new vulnerability the plaintiffs' bar will be quick to leverage into costly class-action litigation.

To be sure, it' s more important than ever to have a recall plan in place that emphasizes airtight logistics and effective strategic communications. Not only must a company be ready to take corrective action, it must ensure that it will be seen and heard doing the right things should a recall ever take place.

A complete recall communications plan is the best way to neutralize the public outrage that regulators, trial attorneys, and consumer groups will use to their advantage. And it' s the only way to inspire confidence in a marketplace that grows more skeptical and more selective with each announcement of a recall or punitive fine.

Gene Grabowski is Senior Vice President of Crisis and Litigation at Levick Strategic Communications and a contributing author to Bulletproof Blog.