Comment from Joe Cala

I appreciate the opportunity to submit comments in response to the Consumer Product Safety Commission’s Request for Information regarding fraudulent or abusive conduct associated with the redemption of consumer product recall remedies (“recall fraud”). While my comments do not directly address mechanisms for detecting or correcting fraudulent redemption behavior, I believe they are relevant to the Commission’s broader goal of improving recall effectiveness, reducing unnecessary burdens on compliant firms, and preserving trust in the recall process. I am a co‑founder and managing principal of Euclid Crisis Management, LLC, a firm dedicated exclusively to supporting CPSC‑regulated companies before, during, and after product recall events. Our work focuses on three areas: (1) recall preparedness and avoidance through education, governance, and mitigation strategies; (2) recall and incident response support, including communications planning and regulatory navigation; and (3) risk transfer through specialized product recall and crisis management insurance programs designed to address the financial and reputational impacts of recalls and related crisis events. Through this work, we engage with manufacturers, importers, distributors, and retailers across multiple industries subject to CPSC jurisdiction, and we regularly collaborate with professionals who have current or prior experience within the Commission and other regulatory bodies. This perspective provides insight into how recalls function operationally and how deficiencies in preparedness or resources can affect recall outcomes. One observation relevant to the Commission’s inquiry is that recall fraud does not occur in isolation from the broader recall ecosystem. Firms that lack adequate preparation, clarity of responsibility, or financial resilience are more susceptible to inefficient recall administration, distorted redemption data, and secondary harms such as adverse publicity or coordinated abuse campaigns. These pressures can increase compliance costs and may negatively affect consumer participation in corrective action plans. Specialty product recall and crisis management insurance is intended, in part, to address these vulnerabilities. These programs frequently support pre‑incident education, mock recalls, and response planning; provide access to experienced recall advisors; and respond to losses resulting from recalls, adverse publicity, cyber‑related events, and other non‑physical disruptions. In this way, such programs can indirectly support recall effectiveness by promoting preparedness, timely execution, and compliance. Importantly, these insurance products are almost always elective and remain underutilized. In our experience, low adoption is driven primarily by limited awareness of their existence and by the mistaken belief that recall risk is adequately covered under other commercial insurance lines. As a result, many higher‑risk firms enter recall situations without the infrastructure or financial certainty necessary to administer recalls efficiently and consistently. From a policy perspective, this raises the question of whether baseline expectations around recall preparedness or financial assurance could support the Commission’s objectives. Regulatory bodies such as the CPSC are uniquely positioned to influence standards of care within regulated industries. While recognizing that mandating insurance coverage is a significant policy consideration, guidance or expectations tied to higher‑risk product categories—such as toys, children’s products, imported consumer goods, or products sold through large e‑commerce platforms—could improve preparedness, reduce friction for compliant firms, and strengthen recall execution overall. I respectfully offer these comments in the spirit of constructive engagement and with appreciation for the Commission’s ongoing efforts to enhance recall effectiveness while limiting unnecessary administrative burden. Respectfully submitted, Joe Cala Co‑Founder & Managing Principal Euclid Crisis Management, LLC