Consumer Issues
Consumers getting smoked by e-cigarettes

Consumers of e-cigarette said they signed up for a free product or a supply at a reduced price but then the company repeatedly charged their credit and debit cards, sometimes wiping out their accounts


While the debate continues about whether e-cigarettes are a safer alternative to tobacco cigarettes and the US Food and Drug Administration (FDA) rolls out its regulations, one thing is for sure. Consumers are curious about trying the new products and many companies are out in force – especially on the Internet — capitalizing on this interest by offering free trials and special deals. But many of these special deals are not deals at all and hundreds of consumers say they’ve gotten ripped off.

The Federal Trade Commission (FTC) has received about 600 consumer complaints against e-cigarette companies. The vast majority of consumers, according to a review of the complaints obtained by through an Freedom of Information request, say they signed up for a free product or a supply at a reduced price but then the company repeatedly charged their credit and debit cards, sometimes wiping out their accounts. Others complained about:

Hidden conditions in the fine print that enroll them in auto-ship programs.

Difficulty reaching the company to cancel orders or return items.

Defective products that the company would not replace.

Website disappearing from the Internet just weeks after they ordered the product.

Products that didn’t come with the accessories shown on the site.

Late product delivery during free trial periods that cut into the time to return it before being charged.

Not being able to cancel or unsubscribe from the auto-shipments because they opened the package.

Proliferating sites


The e-cigarette market is expanding at a rapid pace in the U.S., and is projected to reach more than $2 billion in sales this year. A recent study by the University of California San Diego Moores Cancer Center found that about 10 new e-cigarette brands are being introduced online each month. The study showed an 86 percent increase from 2012 to 2014. And a third to half of all sales from the brands are being made in what has been a largely unregulated online frontier. The UCSD study noted that brands are proliferating online because it costs very little to set up a website to hawk the products.’s investigation found that companies are using a variety of aggressive tactics to attract consumers, including placing pop-up ads on popular national websites.

Consumers told the FTC they also received texts, spam emails and/or harassing calls from companies, and some were offered products after taking an online survey.

Several sites offered consumers the chance to not just buy the product, but to earn money as well by posting banner ads and links for the products on their own webpages or by becoming affiliates.


Many sites are playing up health issues, advertising that e-cigarettes are safer than tobacco cigarettes.

More than 50 companies were named in the FTC complaints and a investigation has found that many of the companies are marketing products under slightly different names through various websites, making it difficult for consumers to contact the actual company selling the products. One Florida address is linked to about 20 different e-cigarette websites and another in the state is linked to at least 25.

Marketed as healthier



Many consumers said they were interested in trying e-cigarettes because they wanted to give up smoking and thought the tobacco-free products were healthier for them. (The UCSD study found that 11 percent of newer brands and 10 percent of older e-cigarette brands made direct claims their products could help users stop smoking tobacco cigarettes.) But it turns out that trying the product was very unhealthy for their wallets.

Rising consumer frustration



The FTC complaints reveal growing frustration with questionable– if not outright illegal– tactics companies are using to sell their products. (Emphasis added in bold.)
Said one consumer in an FTC complaint:

I ordered the No Flame E-Cigarette online on 11/4/12. My credit card was charged $4.95 on 11/6/12. However I didn’t receive the trial kit until 11/15/12. My order confirmation stated that I would receive the product in 3-5 days, however, the package wasn’t received until 11 days after my order. The paperwork that came with the kit states that you may return the product for a refund, but you must call customer service for a Return Authorization Number and return the kit within 30 days. Also, the kit must be in reusable condition. How can you [possibly] return a kit in reusable condition when you have to open the package and put the cigarette in your mouth? Today I discovered that my checking account was charged $99.67. I called the company today 11/19/12 to let them know that I was unhappy with the product and would like to return it (It tastes terrible). They informed me that I was supposed to call within 14 days of PLACING THE ORDER in order to get a refund. I complained and told them that was not really fair as I didn’t even receive the order until 11/15/12 and the paperwork states that I have 30 days to return the product for a refund. False advertising!

The FTC has received more than 100 complaints against NoFlame, a Florida-based company. The BBB, which received 426 complaints against it, gave it an “F” rating. The site has recently changed its offer but still enrolls customers in a monthly payment program.

Another consumer had a problem returning a “free” product.

After completing a brief online survey I was to receive a choice of free product. I choose a ‘free’ E-cigarette. I received the product but was advised by someone that the product was not free and if I didn’t want to be charged for it I had to return it to the company within two weeks. I returned it… Since then they have emailed me twice saying that they hadn’t received the package. I ended up calling the post office in Florida and they said that the company had thousands of the packages that they had not picked up.

One woman said she ordered e-cigarettes as a way to quit smoking tobacco cigarettes but didn’t like it. She never expected to keep getting the product.

Today I [received] two boxes of 10 refill cartridges and my account was charged $149.90 back in February. It overdrew my account and I [received] charges of $125 for it. I have cancer and am trying to quit smoking. I thought this was a dream come true, something to help me quit. It has turned into a nightmare. …I am also on SS disability and don’t’ make ends meet as it is, this $149.90 really messed me up.

Deceptive advertising



Several consumers complained to about Vapex, a Utah-based company that is linked to several different websites selling e-cigarettes. The company was the subject of more than two dozen FTC complaints and currently has an “F” rating from the BBB, which received more than 80 complaints.’s investigation found several deceptive marketing tactics used on various sites linked to Vapex, including promises of free trials that are neither free nor true trials, unsubstantiated claims that e-cigarettes save consumers money, fake testimonials, and a claim that it was the winner of a 2013 E-cigarette taste test that could find no proof existed.

Consumers who signed up for “free trials” were particularly frustrated about Vapex’s response to their complaints and differing contacts listed for the company. One consumer said he ordered a free e-cigarette kit from but when he called the company to complain about a charge for $99.95 he was told there was nothing the company could do because the product was sent by Vapor Ultra. When the consumer called the number the Vapex representative gave for Vapor Ultra, he said it was a non-working number.


The charge on his credit card was from Vapor Ultra, though Vapex’s name was on the package’s return address.

Earlier this month, sent letters to five different addresses linked to Vapex, including the address the company listed in its Utah incorporation papers, alerting it to the deceptive advertising issues and saying if it didn’t cease the practices would file a complaint with the FTC and Utah Attorney General. Vapex did not respond. (See’s complaint to the FTC here.)

One of the addresses was for Arizona-based OZN Web, LLC, which said through its attorney that it was contracted by Vapex to “market” its websites. The attorney, Charity Clark, said OZN has no control over the content on Vapex sites and is not responsible for any deceptive advertising. She said OZN is no longer marketing for Vapex and that its own domains, and haven’t been active since January.


However, FTC records obtained by under an additional Freedom of Information request shows that a consumer who signed up for a two-week trial of electronic cigarettes complained that his credit card was repeatedly charged by VaperXS, including as recently as March. The March charge, he said, came Green Coffee Supra, a site also owned by OZN that sells green coffee extract weight loss supplements.

Wild West


Vapex is among the top five companies with the most complaints to the BBB, which lists 521 e-cigarette companies. Of those, it has given 17.5 percent an “F” rating. The complaints to the BBB regarding e-cigarette companies touch on similar issues as the FTC complaints. Consumers reported problems with auto shipments, unauthorized credit card charges, difficulty reaching the company, and return issues.

Despite the complaints, there has been very little regulatory action. The sheer number of sites and brands has made enforcement difficult, said Sharon Cummins, one of the authors of the UCSD study.

Government regulators have mostly been focusing on the issue of safety and marketing to minors. could find only two states that took action to protect consumers against purchasing scams.

In 2011, Arizona went after Smoke Freely, LLC (aka and Prado). The company – which according to the BBB listed “Mr. Stacked” as its owner and “Sherrie Shorty” as its complaint handler — reached a $10,000 settlement in 2012 with the state requiring that it prominently disclose its terms and conditions associated with its free trial offer, give consumers specific information related to when their accounts would be debited, clearly disclose shipping and handling and restocking fees, and give an additional five days for shipping when calculating the date when a free trial period ends.

Florida’s Attorney General in 2011 reached a similar settlement with Direct E-cig after an investigation found that the company’s “free trial offer” didn’t adequately disclose the details of its cancellation policy. The company issued refunds and agreed to change its marketing to ensure that consumers could view its full terms and conditions, cancel the negative option plan that led to repeated monthly charges, and have at least 14 days from the shipment of a product to request a refund.

To date, the FTC has not taken any action against e-cigarette companies and it could be years before the FDA finalizes its regulations of the industry.

Benjamin Edelman, an associate professor at Harvard Business School who specializes in Internet fraud, said deceptive sellers are hiding in plain sight as the debate about health takes center stage. He said:

The focus on safety has made it all too easy not to pay attention to marketing practices, (such as) bait and switch, automatic renewals…recurring charges, lack of required notice before recurring charges. There is a veritable laundry list of these kinds of malfeasance and folks should be asking questions about that too and not just health effects…Sellers in gray areas take additional liberties and consumers should be especially vigilant.

Look before you vape

Many consumers said they didn’t check out the companies until they started having problems. Before you consider trying e-cigarettes through any kind of offer – especially unsolicited offers – you should:

Research the company online and review what other consumers have said about the company. Also check whether state or federal regulators have received any complaints about the company.

Read all the terms and conditions associated with the purchase before making it. If the terms and conditions are buried in the site or confusing, that is a warning sign.
Think about using a pre-paid credit card to make the purchase to prevent repeated and unwanted charges.

Take action

If you feel you have been the victim of a scam, here’s how to file a dispute with your credit card company. To file a complaint about an e-cigarette company, click here. Read more here about e-cigarette marketing.

Check back for updates from, which will continue to cover deceptive e-cigarette marketing claims.




The Mess in Commexes
Indian Commodity markets are among the worst-regulated. Will the finance minster ask some questions?
The repercussions of the Rs5,600-crore scam at the National Spot Exchange Limited (NSEL) and the commodity transaction tax continue to be felt across the set of badly regulated commodity futures exchanges. On 16th July, just 18 months after its launch, UCX (Universal Commodity Exchange), a company promoted by Ketan Seth of IT People, with large business interests in Dubai, announced its closure. Earlier, the Indian Commodity Exchange had shut shop. 
New bourses for commodity futures trading were permitted after a ban of several decades following excessive and damaging speculation. Yet, no lessons seem to have been learnt. These bourses were cleared without proper scrutiny by a weak regulator—the Forward Markets Commission (FMC). In most cases, a tie-up with public sector entities, or large corporate houses, was considered good enough to lend legitimacy to unknown promoters. 
Just as the NSEL was discovered to have lent money to group entities, in UCX too, promoter Ketan Seth had reportedly withdrawn part of his equity contribution in the form of loans to group companies.
Now, when trading turnover of the entire market has crashed 65% in the first quarter of this year, the regulator has allowed the bourse to ‘suspend’ operations. Will this allow them to clean up their act without attracting public notice and wait for better times to restart? Clearly, there is a lot that needs to be set right with commodities trading, starting with the role of the regulator and the quality of its due diligence in licensing six new bourses as well as framing their rules and regulations. India has six national commodity exchanges and 14 regional ones. 
The Modi government, which has promised us better governance, may want to direct FMC to stop, clean up and shut down a few. It would also be opportune to bring uniformity in the rules governing equity holding, suitability of promoters and governance structures across equity, commodity and currency derivatives markets. 



Dayananda Kamath k

3 years ago

now it is time to apply fit and proper principle to regulators and the authorities who approved appointed them. commodities market are the one responsible for the artificial inflation in india. what is the need for so many commodities exchange in india, and allowing every sundry person to be a paticipent in the same. it is only to manipulate and swindle. the particepents should be only those who deal in these commodities. future market is only for hedging.but it has become primery market.

Parimal Shah

3 years ago

It seems these were promoted in the first place to benefit those with wasted interests and therefor the regulation intentionally was kept in limbo.

MLF seminar on Deemed conveyance: Deemed Conveyance for Your Housing Society

Ramesh Prabhu explained the law, procedures and incentives for obtaining conveyance


To avoid major problems later, or to avoid problems like those faced by Campa Cola compound residents, all members of cooperative housing society (CHS) need to first resolve the issue of becoming the legal titleholder of the land through a conveyance deed or deemed conveyance. Otherwise, “when things go wrong, like in the case of the collapsed Laxmi Chhaya building from Mumbai, it poses a serious risk to your most valuable asset and probably your biggest investment,” said Ramesh Prabhu. He was speaking at a seminar on “Deemed Conveyance – Law, procedure and incentives to meet the 31st Dec deadline” organised by Moneylife Foundation in Mumbai.

Mr Prabhu is a chartered accountant (CA) by profession and an expert on various laws and issues concerning CHS.

Many housing societies are keen to go for redevelopment but they cannot go ahead for want of conveyance. Indeed, nearly 85% of CHS in Maharashtra have not obtained conveyance or deemed conveyance from their builders or landowners. However, there are ways out. “One can use innovative methods like procuring information under the Right to Information (RTI) Act to obtain all the documents from several departments,” pointed out Mr Prabhu.

“In case of the developer or builder or landowners (together promoters) are not willing to, or ready to, sign the conveyance deed, then as per the law, the district deputy registrar (DDR) as the competent authority signs it as promoter/s. In addition, even if there is a court case pending, the DDR, as a statutory authority, can give the deemed conveyance in favour of the CHS,” he added.

One of the issues raised in deemed conveyance applications is that there are two or more buildings on adjacent plots owned or developed by the builder.
Mr Prabhu said, “There are several judgements by the court that permit two or more CHS on a single plot of land to go for deemed conveyance separately. Even condos can be given deemed conveyance.”

Towards the end of the session, Mr Prabhu mentioned some case laws where the completion certificate/ occupation certificate is not required for deemed conveyance, even if a case is pending in a consumer court. Deemed conveyance is possible even if there is balance FSI (floor space index) and disputes have been raised about open space between the two buildings and the FSI thereupon.

When the developer and landowners (promoters) are ready to sign the deed, the CHS can opt for the conveyance deed. In case the promoters are either not ready, or not available, the CHS can opt for unilateral or deemed conveyance.


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