Utah charges three online e-cig companies for violating state laws

[Bill Godshall]

Utah cites three online e-cig companies for violating consumer protection and other laws
http://www.sltrib.com/sltrib/money/58343358-79/utah-act-consumer-llc.html.csp


Anybody know more details of these charges?

While I'm totally supportive of enforcing laws against fraudulent business practices to rip off consumers, it appears that some of these charges were for not complying with some of Utah's many e-cig marketing restrictions.

 

[oplholik]

Sounds to me that these three companies were the usual rip offs, where you sign up and you get a kit, and then they charge your CC every month to send you replacement cartridges. Googling these companies, show many, many complaints.

 

[AgentAnia]

As wary as I am of any inroads made to restrict legitimate ecig marketing, in this case I think Utah is justified and I'm glad to see them go after the shady vendors. As far as I can tell, this action is based on deceptive marketing practices and not on any public health concerns, which is as it should be.

We've seen several threads here about these companies and their misleading "free trial" offers. Basically, they're selling inferior cigalike products at grossly inflated prices (after the trial period, which is free only if you agree to continue w/ their monthly deliveries). They take advantage of new, naive vapers and are doing a disservice to honest vendors.

 

[DaveP]

It's best that those who are out to rip off vapers get shut down early on. One of those sites is the reason I found ECF.

The site was made to look like a TV reporter story where the reporter was going underground to expose a company who offered a free ecig kit to people who would sign a contract in which you gave them a credit card number and they sent you vaping supplies every month. It turned out to be an infomercial. They'd just charge your credit card and keep the shipments coming. The TV reporter actually quit smoking using the ecigs, thus proving that they worked in spite of her initial suspicion. That made the gullible feel confident in handing over their credit card.

The reality was that once it started arriving, you couldn't stop it.

 

[skoony]

this is one of the classical card scams used in almost every conceivable consumer market.
regards
mike

 

[AgentAnia]

this is one of the classical card scams used in almost every conceivable consumer market.
regards
mike

I agree, which is why I always react with sketicism to any "free trial" offer and always read the fine print carefully! (Also those offers of services at "$14.95 for the 1st six months"...)

 

[Nermal]

In general, she said, "hundreds of consumers got burned by these electronic cigarette companies who made false claims and offered free product trials which in reality were not free as the online marketers racked up pricey automatic shipments to credit cards without consumers’ knowledge or their consent."

Glad to see some prosecution on this activity.

 

[Steeldragon]

There is no such thing as a free lunch and I agree that these companies should be punished. We need to police our own too

 

[Racehorse]

The reality was that once it started arriving, you couldn't stop it.

It's the opposite of another problem in the vape industry.......stuff doesn't arrive, and you can't get it to arrive after paying and ordering (Mrs. T's. some mod makers, etc.) Hope people start reporting all of them, too, to their state's attorney generals.

'Cuz down the line, these type of clowns and frauds are just gonna make the industry look bad. And we don't need that.

 

[afrazier5]

Utah cites three online e-cig companies for violating consumer protection and other laws
http://www.sltrib.com/sltrib/money/58343358-79/utah-act-consumer-llc.html.csp


Anybody know more details of these charges?

While I'm totally supportive of enforcing laws against fraudulent business practices to rip off consumers, it appears that some of these charges were for not complying with some of Utah's many e-cig marketing restrictions.

Here is what the media provided me directly:

MEDIA ALERT

"Consumers getting burned by Electronic Cigarette Companies says Division of Consumer Protection, Utah takes action against 3 marketers, issues Citations totaling $1.1M in state finesfor violating consumer laws"

"Companies engaged in deceptive advertising, falsely stated terms of sale, and used negative option selling to charge consumer accounts nationwide via email, phone and online offers"

(For immediate release…)

SALT LAKE CITY, Utah - Francine A. Giani, Executive Director of the Utah Department of Commerce, announced today that the Utah Division of Consumer Protection has cited three "E-Cigarette"companies: OZN Web LLC, located in Phoenix, AZ, Sinless Vapor LLC, located in Heber City, UT and Vapex LLC located in Bountiful, UT for multiple violations of the Utah Consumer Sales Practices Act and the Utah Telephone Fraud Prevention Act. State investigators received hundreds of consumer complaints from across the country claiming these electronic cigarette companies advertised false health claims, posted false customer testimonials, marketed "free" trial offers that were not in fact free of charge, and up charged customer accounts without consent.

"Hundreds of consumers got burned by these electronic cigarette companies who made false claims and offered free product trials which in reality were not free as the online marketers racked up pricey automatic shipments to credit cards without consumers’ knowledge or their consent," stated Francine A. Giani.

Division investigations allege the following;

Vapex LLC from Bountiful, UT operated e-commerce websites tryvapex.com and vapexstore.com where products were advertised as being able to be "smoked anywhere" and listed examples of locations which were in violation of Utah’s Indoor Clean Air Act, including airplanes. The company claimed its product was a "healthy alternative" to traditional cigarette smoking and that it could "reduce serious health risks". In addition, the websites advertised "Risk free starter kits" with minimal shipping fees, lifetime warranty and 100% Satisfaction Guarantee. Terms and conditions were not displayed on the website in a format easily accessed by – 2 – August 27, 2014

consumers, and neither the retail price of the product nor the shipping and handling fees were clearly disclosed to consumers. Additionally, the "Free Starter Kit" was in fact not "free" of charge. Over 89 consumers’ nationwide submitted complaints with CP regarding this company; the complaints showed a pattern of similar conduct through email, radio, internet, and telephone advertising for the company’s products. Vapex was cited by the Division for 329 counts for violating the Utah Consumer Sales Practices Act and the Utah Telephone Fraud Prevention Act and faces a potential maximum state fine of $822,500.

Sinless Vapor LLC from Heber City, UT operated an e-commerce website sinlessvapor.com where they were offered "e-cigarettes" that could be "smoked anywhere" and promoted "New Starter Kit for $4.95 Shipping and Handling" and "Risk Free Starter Kit" with a "100% Satisfaction Guarantee". The company’s terms and conditions were listed on an additional link and were unclear to consumers. The company advertised products through its website and email offers. The Division alleged that company’s practices violated the Utah Consumer Sales Practices Act for deceptive acts, including the use of negative options. Over 20 consumers nationwide complained to the Division of Consumer Protection. The Division cited Sinless Vapor LLC for 94 counts of violating Utah Consumer Sales Practices Act and faces a maximum potential state fine of $235,000.

Ozn Web LLC from Phoenix, AZ operated an e-commerce website vaperxs.com where consumers were offered "e-cigarettes". The Division issued a Citation on May 9, 2014 for 18 counts for violating the Utah Consumer Sales Practices Act with a potential maximum fine $45,000. In June, Ozn Web LLC agreed to a Settlement Agreement with the Division in which the company admitted to the violations and agreed to remove all misleading advertising claims, refrain from misusing "free" in any sales or promotions, provide cancellations and refunds for consumers, change their website language to reflect clear terms of sale and pay a $10,000 state fine before December 2014.

 

[Jman8]

There is no such thing as a free lunch and I agree that these companies should be punished. We need to police our own too

With the companies mentioned in this thread, I would agree that there is no such thing as a free lunch.

But one Utah company sent me not one, not two, not three, but 4 free samples (10 ml bottles) over course of a few months. I offered to pay for two of them (really I wanted to), but the vendor declined. Then shortly later removed their business from the market (due to legal issues of Utah vaping) and well I never paid for the 4 bottles, which I really enjoyed one of the flavors. So, free lunch was obtained.

 

[Bill Godshall]

Aaron Frazier posted what appeared to be a press release issued by the State of Utah that included the following statements

Vapex LLC from Bountiful, UT operated e-commerce websites tryvapex.com and vapexstore.com where products were advertised as being able to be "smoked anywhere" and listed examples of locations which were in violation of Utah’s Indoor Clean Air Act, including airplanes. The company claimed its product was a "healthy alternative" to traditional cigarette smoking and that it could "reduce serious health risks"

Sinless Vapor LLC from Heber City, UT operated an e-commerce website sinlessvapor.com where they were offered "e-cigarettes" that could be "smoked anywhere"

Even though it may be illegal to vape in some locations in Utah (and elsewhere), I'm not aware of any law (in Utah or anywhere else) that bans e-cig companies from claiming that their products can be used anywhere (and its a truthful statement, regardless of any legal restrictions on vaping). Seems like Utah officials are claiming that their state's Clean Indoor Air law preempts 1st Amendment rights of the US Constitution.

I also wasn't aware that the Utah Clean Indoor Air Act banned vaping on airplanes, as the federal government (not the states) has exclusive authority to regulate the activities in airspace over the states. Although the US DOT proposed a regulation to ban vaping in airlines back in 2011, it hasn't issued the Final Rule.

Truthfully claiming that e-cig are a "health alternative" to cigarettes, and truthfully claiming that e-cigs could "reduce serious health risks" of smoking don't violate any laws in Utah (that I'm aware of). If Utah has enacted such a law, it would violate the 1st Amendment of the US Constitution.

Don't know if Utah charged those companies for any of these things (that I cited above), or if Utah officials just included those things in their press release to intimidate and bully other e-cig companies into believing that those things were illegal.


In contrast, the State of Utah has the right and duty to enforce laws that prohibit businesses from defrauding consumers and stealing their money.

 

[Nate760]

Even though it may be illegal to vape in some locations in Utah (and elsewhere), I'm not aware of any law (in Utah or anywhere else) that bans e-cig companies from claiming that their products can be used anywhere (and its a truthful statement, regardless of any legal restrictions on vaping). Seems like Utah officials are claiming that their state's Clean Indoor Air law preempts 1st Amendment rights of the US Constitution.

Moreover, there's no possible argument to be made (even disingenuously) that "you can use it anywhere" amounts to a prohibited claim of health benefits or reduced risk.

 

[pamdis]

Moreover, there's no possible argument to be made (even disingenuously) that "you can use it anywhere" amounts to a prohibited claim of health benefits or reduced risk.

I think FDA's logic is that since you can't compare tobacco products, then if you say you can use it anywhere, it is the same as saying there is no smoke, therefore a reduced risk claim.

 

[AndriaD]

I think FDA's logic is that since you can't compare tobacco products, then if you say you can use it anywhere, it is the same as saying there is no smoke, therefore a reduced risk claim.

So it would seem that the FDA is interpreting that to mean "telling the truth is violating the law." Since there really is no smoke.

Andria

 

[Nate760]

I think FDA's logic is that since you can't compare tobacco products, then if you say you can use it anywhere, it is the same as saying there is no smoke, therefore a reduced risk claim.

Of course, by this logic, smokeless tobacco is making a reduced risk claim just by the act of calling itself "smokeless."

Speaking of that, I'm reminded of when Skoal Bandits came out (back in the days when you could still advertise certain tobacco products on TV). The commercials were aimed exclusively at smokers, and the product portrayed as something to use in a pinch when you can't have a cigarette. It would seem that's exactly the same sort of thing we're dealing with here.

 

[sonicdsl]

Of course, by this logic, smokeless tobacco is making a reduced risk claim just by the act of calling itself "smokeless."

Speaking of that, I'm reminded of when Skoal Bandits came out (back in the days when you could still advertise certain tobacco products on TV). The commercials were aimed exclusively at smokers, and the product portrayed as something to use in a pinch when you can't have a cigarette. It would seem that's exactly the same sort of thing we're dealing with here.

Ahh Bandits... I remember using those back in the day on family trips since my sis & I weren't permitted to smoke in the family car.

/nostalgia

 

[Bill Godshall]

Please note that it appears the State of Utah (not the FDA) made the claims that I refuted on this thread.

The State of Utah has history of making false claims about e-cigs.

Just last week, the Utah Health Dept released a survey finding that youth cigarette smoking declined from 5.2% to 3.9%, and that youth smokers were exponentially more likely than nonsmokers to report past month e-cig use. But the Utah Health Dept failed to report the drop in youth smoking, failed to report that youth smokers were exponentially more likely than nonsmokers to report past e-cig use, and instead falsely insinuated e-cigs are gateways to cigarettes for youth to confuse, scare and lobby for more e-cig bans.
Utah teens embracing e-cigarettes 'left and right' | The Salt Lake Tribune
http://www.tobaccofreeutah.org/pdfs/tpcpfy14report.pdf
http://www.tobaccofreeutah.org/pdfs/tpcpfy13report.pdf

 

[Nate760]

I wonder if they'll have to revise the Word of Wisdom to include e-cigs now.

 

[DrMA]

I always wonder, when I see these cherry-picked stats, how many 12th grade "children" are actually over 18.