PTAC Fire Hazard Leads to $8.5 Million Daikin Settlement
Key Highlights
- Daikin agreed to pay an $8.5 million civil penalty for delayed reporting of a product defect in PTAC units.
- The defect involved DigiAir modules that could overheat, causing fire hazards and potential injuries.
- The settlement requires Daikin to appoint an internal compliance monitor and improve safety reporting procedures.
WASHINGTON, D.C. — Daikin Comfort Technologies Manufacturing Inc. has agreed to pay an $8.5 million civil penalty to resolve allegations that it failed to immediately report a product defect involving certain Packaged Terminal Air Conditioners and Heat Pumps (PTACs), according to the U.S. Consumer Product Safety Commission (CPSC).
The settlement, which has been provisionally accepted by the CPSC, addresses allegations that Daikin did not promptly notify the agency that PTAC units equipped with DigiAir modules contained a defect that could create a substantial product hazard and an unreasonable risk of serious injury or death.
According to the CPSC, Daikin received multiple warranty claims related to the PTAC units between 2017 and 2023. The agency stated that the company also received more than a dozen reports of fires and one report involving a smoke inhalation injury during that period.
The commission alleges that, despite having information that reasonably supported the conclusion that the products presented a substantial hazard, Daikin did not immediately report the issue as required under the Consumer Product Safety Act.
The CPSC and Daikin jointly announced a recall of the affected PTAC units on Aug. 3, 2023. According to the recall notice, the DigiAir module compressor could overheat, creating burn and fire hazards.
In addition to the civil penalty, the settlement requires Daikin to appoint an internal compliance monitor and maintain internal controls and procedures designed to ensure compliance with federal product safety requirements.
The agreement also requires the company to enhance its compliance program and submit annual reports covering its compliance efforts, internal controls, and audits evaluating the effectiveness of those measures.
The commission's acceptance of the settlement remains subject to public comment.
For HVAC contractors, particularly those serving hotels, multifamily properties, health care facilities, and other buildings that utilize PTAC equipment, the case highlights the importance of product safety monitoring, recall awareness, and compliance with federal reporting requirements throughout the equipment lifecycle.