Daikin let fire reports pile up before recalling overheating AC units, and now owes $8.5 million

Daikin will pay out millions after federal regulators said the company sat on years of warning signs tied to overheating air-conditioning units.

The company agreed to an $8.5 million civil penalty after reports of fires and a smoke inhalation injury surfaced before a recall was finally announced.

What happened?

Federal regulators said Daikin Comfort Technologies Manufacturing, Inc. of Waller, Texas, did not promptly alert the government to a safety problem involving some packaged terminal air conditioner and heat pump units, known as PTACs, that used "DigiAir" modules, according to a U.S. Consumer Product Safety Commission announcement published by PR Newswire.

According to the CPSC, the company logged warranty claims connected to the units between 2017 and 2023, along with more than a dozen reports of fires and one report involving smoke inhalation.

Regulators said Daikin still failed to report the issue right away, even though the information available to the company, in the CPSC's words, "reasonably supported the conclusion" that the units had a defect that could amount to a substantial product hazard or lead to serious injury or death.

A recall of the PTAC units was announced jointly by Daikin and the CPSC on Aug. 3, 2023, the agency said.

Regulators said Daikin had years of warning signs before the recall was issued.

What's being done?

Beyond the $8.5 million payment, the settlement puts additional compliance measures in place for Daikin. Those terms include naming an Internal Compliance Monitor and keeping internal controls and procedures aimed at meeting requirements under the Consumer Product Safety Act.

The company also committed to bolstering its compliance program and submitting annual reports covering that program, its internal controls, and audits evaluating how well those measures work.

The settlement has been provisionally accepted by the Commission and remains open to public comment. The announcement also said Michael Evans, a Trial Attorney in the Division of Enforcement and Litigation, represented the Commission in the case.

Federal law also prohibits the sale of products that are subject to a recall.

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