Just five days into 2018, computer giant HP was forced to recall 52,000 lithium-ion batteries. HP warned that the batteries could overheat and cause serious burns after receiving eight reports of batteries overheating, melting, or charring. HP offered to replace the recalled batteries for free because it’s not possible for a consumer to remedy the problem.
This is not the first time HP has struggled to find reliable batteries for its products. In June 2016, the company issued a recall of 41,000 lithium-ion batteries that in 2017 was expanded to include 101,000 batteries.
HP claims its battery problems are due to supplier issues. For those in the first-party claims and subrogation communities, the story checks out, as lithium-ion battery explosions and fires continue to be a major problem and source of claims. In the area of e-cigarettes, hoverboards, drones, laptops, etc., more powerful batteries coupled with seemingly shoddier sourcing practices and testing programs are leading to ever-increasing claims of fires caused by defective batteries. While packaged in a unique shape, laptop batteries are basically a series of smaller battery cells not dissimilar to the “18-650” batteries that power most e-cigarettes and vape mods (16-650 stands for the diameter (18mm) and length (65mm), the “0” denoting the battery’s cylindrical shape).
The problem with unsafe batteries is exacerbated by the swiftly changing retail landscape, with outdated laws intended to hold those who profit from the sale of dangerous products unable to keep up with 2018 consumer habits. Batteries bought through a vendor on Amazon (remember, Amazon does not “sell” many of the items you see when you go to its site — cue eye-roll emoji — rather the actual, purported “seller” is listed in small print) are often not subjected to the testing protocols forced upon battery makers by powerful buyers like Apple, Samsung, etc. As such, when a battery is purchased online and not directly from the brand owner’s website (Apple, Samsung, LG, etc.), there is almost no telling where that battery originated, how safely it was produced, and what quality assurance measures and third party testing the manufacturer implemented to catch unsafe products before they get to consumers. Often, the answer is “little or none.”
When companies like HP have to issue battery recalls and industry giants like Samsung have battery safety issues (remember the infamous Note 7 and that whole mess), it should sound alarm bells for consumers and the companies that insure them. It begs the question, if HP (a powerful buyer that can force whatever buying terms and safety standards it wants on its battery vendors) has issued multiple recalls for battery defects, what hope is there for the rest of us buying batteries for phones, toys, laptops, and e-cigarettes online that we are getting a safe product?
The uncomfortable truth is most online sites do not sufficiently verify the quality and safety of the batteries that appear on their sites through third party testing, factory audits, and similar measures companies like Apple routinely perform and force on their suppliers. At least one reason why is simple – a growing number of cases have held that online “retailers” are actually not “retailers” and are not responsible for defects in products purchased through their sites. They are allowed to profit from whatever is being sold, but buyers have almost no recourse against the website. Instead, injured consumers (and their insurers when homes and businesses suffer fires) are sent on a wild goose chase trying to hold accountable the pop-up LLC that is actually “selling” the product through the well-known online site.
Inevitably, in the case of lithium-ion batteries, this rabbit-hole excursion leads to unsafe factories (often in Shenzhen, China) that are either making batteries that are much less safe than consumers expect when buying something through a huge, well-known online site or, worse, are old, generic batteries that are re-wrapped to look like authentic brand name batteries, i.e. knockoffs. Holding the foreign company accountable is, sadly, extremely difficult, at best, meaning consumers and their insurance companies are left holding the bag, while those that profit from the sale of these unreasonably dangerous products walk without liability.
Consumers must consider whether it is worth spending the extra money to buy batteries from a reputable company rather than buying from some company about which nothing is known that has popped up and is selling products through the Amazon Marketplace or similar outlets. For example, in our household, if we need a replacement laptop battery, we buy it either directly from the brand owner (Samsung, Apple, LG, etc.) or we go into a brick and mortar store like Best Buy or Wal-Mart who is more likely to be held accountable if something goes wrong and, as such, is incentivized to sell safer products.
Unfortunately, most consumers do not know the risk they are taking buying lithium-ion batteries from unknown vendors online. Insurance companies would be wise to educate policyholders on the dangers of buying lithium-ion batteries online unless they buy directly from the brand owner’s website.
Always be careful when purchasing lithium-ion batteries online (maybe just do not do it) because often a “seller” appears to be a well-known U.S. company but is, in fact, an untraceable foreign entity that may be here today and gone tomorrow. This lack of clarity when shopping online may be particularly confusing for some elderly shoppers who understandably think that if they go to Amazon.com, and they pay Amazon, and the package arrives in an Amazon box, that they purchased the product from Amazon. Until product liability laws change to uphold these consumer expectations and account for the modern way in which consumers shop, it might be best to vote with your pocketbook by refusing to purchase batteries through online outlets
If you should have any questions regarding this article or subrogation in general, please contact Richard Schuster at [email protected] or Gary Wickert at [email protected].