The National Highway Traffic Safety Administration requires automakers to pass along claims of car defects from consumers. By gathering this information, the NHTSA can spot trends and determine when a mandatory recall should be initiated. While the laws requiring defect reporting are more than a decade old, the system still falls short of expectations.
An audit conducted by the Office of the Inspector General last year found that the NHTSA did not have sufficient skill and resources in place to collect this vehicle safety data and ensure that it was both accurate and complete. In addition, there is substantial evidence that automakers are not following the regulations in reporting auto defect claims. There are unexplainable gaps in the level of reporting done by various automakers. There are also clear cut cases where automakers failed to report serious defect complaints.
The NHTSA fined Honda and Chrysler for failing to forward complaints of defects. The companies were fined $70 million apiece. From 2003 to 2014, Honda failed to pass along 1,729 auto defect claims that involved death or injuries suffered by consumers. One company that was not fined was Volkswagen, but there are reasons to suspect that it, too, is not complying with reporting guidelines.
An investigation into auto defect complaints found that Volkswagen reported less than one-tenth as many consumer complaints as Honda from 2010 to 2015. In response to the investigation, Volkswagen reported that it would pursue a third-party audit of its reporting. Whatever the findings of that audit, it is clear that defect reporting mechanisms are not working as the NHTSA intended.
Sources: Click 2 Houston, “Major automakers misreporting car defects to NHTSA,” by Joel Eisenbaum, 24 March 2016