60 Minutes, the long-running CBS newsmagazine program, recently aired a report concerning the safety of merchandise that has been sold by discount flooring retailer Lumber Liquidators. Specifically, samples of both wood and laminate flooring that had been made in China had levels of formaldehyde that were higher than allowed by legal standards. The report has caused Lumber Liquidators stock to plummet and the chairman of Lumber Liquidators disputes these findings but the evidence may be too hard to ignore. What does this mean to consumers?
Formaldehyde is a common chemical that is used in a wide variety of consumer products from building materials to glues. Exposure to formaldehyde fumes can cause irritation of eyes, nose, and throat. It is also known to cause cancer in people who have been exposed to high-levels of it. As the popularity of “composite wood products” such as particle boards and plywood used increases in the modern furniture manufacturing, so does our exposure to formaldehyde. Due to this, the California Air Resources Board established the Airborne Toxic Control Measure (ATCM) to set acceptable formaldehyde standards for products sold, offered for sale, supplied, used or manufactured for sale in California back in 2007.
Investigators initially tested wood products that had been made in China that were being sold at Lumber Liquidators locations in California and found that all of them surpassed the legally allowed figures for formaldehyde emissions by third-party testing facilities. Following this, laminate flooring was purchased from Lumber Liquidators in Florida, Illinois, New York, Texas and Virginia. They were sent to two different independent labs for testing. All but one of the thirty-one samples were found to have formaldehyde levels that make the Lumber Liquidators products indoor pollutants under EPA classifications. In 2010, the California standards for formaldehyde emissions were signed into national law, which will go into effect soon. Children are more likely to show symptoms of lung problems than adults but everyone is vulnerable at this level of exposure in the long-term. In the context of flooring, it may be infants, who crawl and play on the ground, who are most at risk to acute effects of formaldehyde exposure.
It is important to note that two of the experts who spoke with 60 Minutes – Richard Drury an environmental lawyer and Denny Larson of the nonprofit environmental group Global Community Monitor – have been backed by short sellers. Short sellers are Wall Street insiders who attempt to make a profit from stocks which they believe to be overvalued. When interviewed for the story, Tom Sullivan – Lumber Liquidators founder and chairman – implied that this was the motivation for the investigation.
Unfortunately, Bloomberg has reported that the first canary in the coalmine was an obscure individual investor in his 20s. Xuhua Zhou found a major increase in their profit margins to be suspicious, linked it to their sourcing, and paid for samples of their product to be analyzed. Once he learned that Lumber Liquidators products were failing to meet safety standards, he wrote an article proclaiming that the company was risking customer safety and overvalued for Seeking Alpha, an investing website, back in June 2013.
In addition, Sunday’s story on 60 Minutes included video evidence from Lumber Liquidators suppliers in Changzhou, China. Under the guise of buyers doing research overseas, the investigators spoke with the general manager of one plant who boasted that one of the products they made was a top seller for Lumber Liquidators. When asked if the laminate flooring was compliant with California’s emissions standards (CARB 2), he said it was not. The same thing took place at the other two plants but the products sourced from these mills for Lumber Liquidators have all been labeled as CARB 2 compliant.
Consumers who have purchased products from Lumber Liquidators aren’t the only ones who should be concerned. Formaldehyde is legally used in a wide variety of products and unfortunately, the problem of excessive formaldehyde emissions – be it due to an oversight or unethical business practices – could be taking place in your home already. There are several factors which contribute to how much harm formaldehyde will cause including its concentration in an environment, the period of exposure, and an individual’s sensitivity to it.
Removing the flooring from your home would be a radical first step, but it may be something you should consider. In the future, try to buy true hardwood flooring and furniture whenever possible. It is also very likely that you simply aren’t able to undergo major home renovations or perhaps you rent your living space. Even despite extreme efforts – you may still have products that contain formaldehyde in your home. If you’re concerned about possible exposure in your home, you may want to consider purchasing a medical-grade air purifier. Austin Air’s Healthmate Plus is specifically designed to adsorb formaldehyde, as well as well other harmful gasses in your home including volatile organic compounds (VOCs) and chemicals. Visit our products page for more information.
