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Car Maker Hyundai fined $17 Million for failure to report brake defect

Auto maker Hyundai has agreed to pay a $17.35 million civil penalty placed against it by the National Highway Traffic Safety Administration (NHTSA) because it failed to promptly report a safety related defect. In addition to the fine, Hyundai also agreed to comply with NHTSA oversight requirements. The defect occurred in 2009-2012 Hyundai Genesis cars and involved corrosion in critical brake system components, resulting in reduced braking and an increased risk of crash.

According to the NHTSA, Hyundai was aware in 2012 that brake fluids used in the Genesis did not inhibit corrosion in crucial components of the car's brake system. Instead of issuing a recall, dealers were instructed by Hyundai to change the brake fluid in the vehicles affected without notifying customers the consequences of failing to change the brake fluid. Owners were not notified of the potential safety consequences either.

In October 2013, as a result of the NHTSA investigation, Hyundai issued a recall of the affected vehicles. While there have been no fatalities as a result of the defect, six people have reported collisions with two reports of injuries. As of January 2014, Hyundai had received over 80 complaints about the Genesis most of which suggested braking difficulty.

As part of the agreement, Hyundai will make improvements to its process of promptly reporting safety related defects and includes the creation of a U.S. Technical committee to review and decide on potential Hyundai-specific safety recalls.

Federal law requires automakers to report safety related defects. When companies fail to act with regard to safety, people can be harmed. This order is a step to ensure that Hyundai follows the law and changes the way it deals with safety related defects.

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