CVS Caremark has agreed to pay US$45,000 civil penalty for failing to report that it sold children's jackets that posed a safety hazard

Cindy Allen

WOONSOCKET, Rhode Island , August 5, 2011 (Associated Press) – U.S. regulators said Thursday that CVS Caremark Corp. agreed to pay a $45,000 civil penalty for failing to report that it sold children's jackets that posed a safety hazard.

The U.S. Consumer Product Safety Commission said that between August 2008 and January 2009, CVS stores sold children's hooded jackets that had drawstrings at the neck. Since 2006, the commission has regarded such jackets as defective because the drawstrings create a significant risk of strangulation. The jackets CVS sold, which were marketed under the names Golden Grove and Young USA, were recalled in March 2009.

The CPSC alleged that CVS knowingly refused to report that it had sold the jackets. The agency said companies are required to inform it within 24 hours after getting information that a product creates a risk of injury or does not comply with safety rules. CVS denied the allegations as part of the settlement, which has been provisionally accepted by the CPSC.

CVS Caremark reported its second-quarter results on Thursday, and said its profit fell 1 percent while revenue grew 11 percent. Its shares lost $2.21, or 6.1 percent, to $34 on a day the S&P 500 fell almost 5 percent.

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