The U.S. Consumer Product Safety Commission (CPSC) announced today that Aqua-Leisure Industries, Inc., of Avon, Mass., has agreed to pay a civil penalty of $650,000. The penalty agreement (pdf) has been accepted provisionally by a 4-0 vote of the Commission.

The settlement resolves CPSC staff allegations that Aqua-Leisure knowingly failed to report a defect involving its inflatable baby boats to CPSC immediately, as required by federal law. The leg strap in the seat of baby boats manufactured from August 2002 to July 2008 can tear, causing children to unexpectedly fall into or under the water, posing a risk of drowning.

In 2001, Aqua-Leisure and CPSC conducted a recall of 90,000 "Sun Smart" inflatable baby boats after receiving 12 reports of the seats tearing and causing children to fall into the water. Four children became completely submerged before a caregiver was able to reach them. No injuries were reported.

After the 2001 recall, Aqua-Leisure continued to produce different versions of the inflatable baby boats, which also became the subject of consumer complaints. Between July 2003 and July 2006, Aqua-Leisure became aware of 17 incidents involving inflatable baby boats sold after the 2001 recall in which the seats "fell out," "ripped," "failed," "tore," "split" or "separated," including four incidents in which a baby boat seat ripped, causing children to fall into the water unexpectedly. By October 31, 2008, Aqua-Leisure was aware of at least 24 consumer complaints regarding several models of inflatable baby boats since the 2001 recall but did not adequately inform the CPSC until May 2009.

Aqua-Leisure and CPSC announced a recall of 4 million inflatable baby boats on July 2, 2009. The baby boats were sold nationwide from December 2002 through June 2009 for between $8 and $15. By the date of the recall, there were 31 reports of the boat seats tearing, causing children to fall into or under the water. No injuries were reported.

Federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard, or ban enforced by CPSC.

In agreeing to the settlement, Aqua-Leisure denies CPSC staff allegations that its inflatable baby boats could create an unreasonable risk of serious injury or death, or contained a defect that could create a substantial product hazard, or that Aqua-Leisure violated the reporting requirements of the Consumer Product Safety Act.

Pursuant to the Consumer Product Safety Act, CPSC must consider the appropriateness of the penalty to the size of the business of the person charged, including how to address undue adverse economic impacts on small businesses. Aqua-Leisure is a small business as set forth in the Small Business Administration guidelines regarding size of business.