Consumer safety regulators investigate Lumber Liquidators
The Consumer Products Safety Commission said it is investigating Lumber Liquidators after a CBS “60 Minutes” expose claimed some of its Chinese-made laminate flooring posed health risks.
“We want to know as soon as possible whether these products present a health risk,” Chairman Elliot Kaye said in a call with reporters Thursday morning.
The results from CPSC’s testing, which is being done by an independent lab, could take months, he said. CPSC could end up recalling the products.
It’s also possible that any decision might not provide the “clarity where consumers will say, ‘Hey I need to take action,’” Kaye said.
Kaye apologized for the delay in making the announcement, which was expected weeks ago. But what he called an “anti-consumer” provision of the Consumer Product Safety Act requires them to notify the company and give it 15 days to respond before making a public statement.
CBS, citing independent tests it ran, had claimed the flooring sold by the nation’s largest hardwood flooring retailer contained levels of formaldehyde, a carcinogen, above the standard set by the California Air Resources Board.
Lumber Liquidators, which has been in virtual free fall since the CBS report aired, surged 8 percent on the news in mid-morning trading.
In its tests, CPSC is not using the so-called “deconstructive” method that the California Air Resources Board uses to investigate products. It is testing the flooring “as it is used in the home,” Kaye said.
Lumber Liquidators has argued that is the proper testing and that the deconstructive CARB test is wrong. CBS used both testing methods and found Lumber Liquidators’ product showed excessive levels of formaldehyde under both methods.
Lumber Liquidators told investors recently that CARB has found excessive levels of formaldehyde in its products and acknowledged that it is in talks with that regulator.
CPSC, which is coordinating with other federal agencies, including the Environmental Protection Agency, the Federal Trade Commission Agency, the Centers for Disease Control and Prevention and the Agency for Toxic Substances and Disease Registry, has been collecting samples of flooring that have been on the shelves since June 2012.
The CPSC could end up recalling the products if it believes they offer a “substantial health hazard,” Kaye said. But the science is murky and long-term effects of formaldehyde exposure are not well understood, he added.
California’s regulation on formaldehyde exposure is expected to become a national standard soon. In the meantime, the lack of a federal standard won’t hinder the CPSC, he promised.
“If we don’t have a standard, we pursue it under a defect,” Kaye said.
Since consumers have also complained about Lumber Liquidators’ bamboo and engineered flooring, Kaye said the commission could eventually expand its investigation into other Lumber Liquidators products.
“Lumber Liquidators is fully cooperating with the US Consumer Product Safety Commission and has already provided a significant amount of testing and safety information to the agency staff,” the company said in a statement.
“We have been in direct communication with CPSC staff over the past several weeks and expect them to review our products using sound science and test methods that evaluate finished flooring as used in consumers’ homes. It is our firm belief that finished product testing, rather than deconstruction, is the best approach to determine consumer safety. We look forward to working with the CPSC on this matter.”