World
E-Cigs Subject to Pre-Market Approval under FDA Final Rules
The FDA is reigning in some aspects of the marketing of e-cigarettes in its finalized rule issued today, which bans their sale to minors, requires health warnings in ads and on product packages, prohibits the distribution of free-samples and requires manufacturers to show that the products meet applicable public health standards before receiving authorization from the FDA.
 
“The actions being taken today will help the FDA prevent misleading claims by tobacco product manufacturers, evaluate the ingredients of tobacco products and how they are made, as well as communicate their potential risks,” the agency said in a press release.
 
In the absence of regulation, the rapidly expanding $3.5 billion e-cigarette industry has been heavily marketing the products with questionable claims — both online and in the shops themselves — that they are safe, healthier than tobacco cigarettes and can help smokers quit tobacco, TINA.org investigations of the advertising revealed.
 
While a recent British Royal College of Physicians report found that the benefits of e-cigarettes, which are battery powered devices that heat flavored nicotine-laced liquids into vapor — far outweigh the potential harms and urged smokers to switch to vaping, the U.S. Preventive Services Task Force when evaluating e-cigarette studies concluded that “the current evidence is insufficient to recommend electronic nicotine delivery systems for tobacco cessation.” And several other key reports found that e-cigarettes contain harmful chemicals and can compromise immune systems in the lungs. A 2014 report by the World Health Organization, for example, stated that for some brands of e-cigarettes, the level of cancer-causing agents in the aerosol “such as formaldehyde and other toxicants like acrolein have been found to be as high as in the smoke produced by some cigarettes.”
 
“Today’s announcement is an important step in the fight for a tobacco-free generation – it will help us catch up with changes in the marketplace, put into place rules that protect our kids and give adults information they need to make informed decisions,” said U.S. Health and Human Services Secretary Sylvia Burwell.
 
The FDA has been heavily criticized as moving too slowly to regulate the industry at a time when use of e-cigarettes, which are marketed in child-friendly flavors such as bubble gum and fruit loops, has skyrocketed. A survey by the FDA and the Centers for Disease Control and Prevention found that current e-cigarette use among high school students increased by 900 percent from 1.5 percent in 2011 to 16 percent in 2015. Advocates for regulations are concerned that youngsters could become addicted to the nicotine used in e-liquids. Studies have shown nicotine can negatively affect adolescent brains.
 
The finalized rule, however, does not yet restrict the marketing or flavors, nor does it take strict steps to prohibit online sales to minors, said Matthew Myers, president of the Campaign for Tobacco Free Kids, which has scrutinized the industry’s marketing to minors.
 
“The rule announced today falls short in protecting kids from e-cigarettes. It does nothing to restrict the irresponsible marketing of e-cigarettes or the use of sweet e-cigarette flavors such as gummy bear and cotton candy, despite the FDA’s own data showing that flavors play a major role in the skyrocketing youth use of e-cigarettes,” said Myers.
 
Under the rules, manufacturers of e-cigarettes and that were on the market after Feb. 15, 2007 must register with the FDA, provide details of ingredients and health risks, and are subject to inspections. It also prohibits vending machine sales if consumers under 18 have access to them. But e-cigarettes can continue to be on the market for three years while their manufacturers submit and the FDA reviews their new tobacco applications. The ban on sales to consumers 18 and under will take effect in 90 days.
 
The final rule, which also affects cigars and pipe tobacco, comes five years after FDA first announced it would regulate all tobacco products and more than two years after it issued a proposed rule. The rule was issued under the 2009 Family Smoking Prevention and Tobacco Control Act, which gave the FDA immediate regulatory authority over cigarettes, cigarette tobacco, smokeless tobacco and roll-your-own tobacco and also authorized it to extend its jurisdiction to all other new tobacco products.
 
Check back for updates on the FDA’s finalized rule. For more of TINA.org’s coverage of e-cigarette marketing, click here
 
 

User

Understanding CIBIL report and keeping the score high with safe and smart saving
It has been around 12 years since Credit Information Bureau (India) Ltd (CIBIL), the country’s first credit bureau started its operations. However, there still are several myths, and apprehensions among people about functioning and the role played by credit bureaus like CIBIL as well the credit score. To demystify such myths and explain easy ways to improve the credit bureaus for becoming responsible borrowers, CIBIL along with Moneylife Foundation and Softcell Technologies held a seminar in Mumbai. 
 
The speakers included Harshala Chandorkar, Chief Operating Officer (COO) of CIBIL, Sucheta Dalal, Managing Editor of Moneylife magazine and Debashis Basu, Editor & Publisher. 
 
The first session began with Ms Dalal speaking on the mistakes that affect your financial life and how to keep money safe from financial mistakes, Ponzi schemes, email fraud etc. Many have lost huge amounts of money in pyramid, Ponzi, multi-level marketing (MLM), chain marketing and chit funds such as Herbalife, Amway, Saradha, Rose Valley, SpeakAsia, Gold Quest or QNet. Many are oblivious of how costs and compounding interest can impact borrowings or investment. Several people want to have a credit card and do not even read the terms and conditions, especially the interest rates and charges that are usually in the range of 40% to 65%. Looking at the increased use of credit reports, credit history of borrowers and credit scores by lenders, Ms Dalal said one needs to be really careful in financial dealings, especially while availing and repaying any loan or credit card. This is because, not paying EMIs or credit card dues on time and, in full, can make the person a defaulter in the credit bureau records and disallow him any kind of credit for seven long years, she added.
 
Lured by high returns, many invest in corporate fixed deposits. Similarly, many opt for fixed deposits of co-operative banks, which pay a higher interest as compared to nationalised banks. Unfortunately, unaware of the risk involved, many have ended up losing their money in such fixed deposits. Mr Basu in his session explained that to save and invest smartly, one needs just a few products. Based on one’s financial goals, investment horizon and tax bracket, they should invest in a mix of equity and fixed income products. Not to forget, make the power of compounding work to your benefit. So, be safe as much as possible, as early as possible, in the right products, he said.
 
Ms Chandorkar, the COO of CIBIL provided some facts about the credit bureau. She said, founded in 2001, CIBIL has a membership base of over 2,000 comprising credit institutions like banks, financial institutions, non-banking finance companies (NBFCs) and credit card companies. "CIBIL operates in two segments, consumer bureau and commercial bureau. The consumer bureau hold credit information of about 500 million individuals, while commercial bureau has information of businesses and hold about 22 million records," she said.
 
Ms Chandorkar then explained in details, various sections from a CIBIL credit report and how to read and understand it. A CIBIL report contains information in sections, like personal information, accounts (held by the entity), and enquiries performed (for obtaining credit)... "However," she said, "A CIBIL credit information report does not show information like savings account, transactions details on your cards, investments like mutual funds, stocks or insurance and utility payment details."
 
The COO, who is a member of the pioneering team that established credit information infrastructure in India, then informed the audience about the credit score methodology used by CIBIL. She said that if the CIBIL credit score ranges between 300 and 900, it indicates probability of default. "While high score indicated that the individual is very likely to pay all loans on time, low score means there are more chances of defaults," she said. 
 
Explaining the parameters used in a CIBIL credit score, Ms Chandorkar said, "There are four basic components with difference weightage in a CIBIL credit score. Past performance has a weightage of 30%, while, credit type and duration as well as leverage has a weightage of 25% each. Rest 20% weightage is based on other factors."
 
According to the COO of CIBIL, 79% of the loans approved are for individuals with a CIBIL TransUnion score that is greater than 750. Anyone can purchase his/her CIBIL TransUnion score either one time (Rs550 per report) or regular subscription. CIBIL offers two subscription, bi-annual, where the individual can obtain two score reports in a year for Rs800 and quarterly subscription that provides four score reports at Rs1,200 during the 12 months period.
 
Ms Chandorkar then demystified some common myths about the credit bureau, like CIBIL is a defaulters list, CIBIL rejects loan application, CIBIL blacklists an individual and CIBIL should make changes on its own in the database. She said, none of the statements are true. CIBIL is not a defaulters' list, neither does it reject loan applications nor does it blacklist anyone. "Credit applications are accepted or rejected by lenders and not by CIBIL and since it is only a repository, it cannot make any changes in the database. It is the lenders who can make changes in their records that are submitted to credit bureaus," she added.
 
Several borrowers, especially defaulters are under the impression that once their 'account' is deleted from CIBIL, they can obtain fresh loan or credit cards. Ms Chandorkar said, "Accounts cannot be deleted from the CIBIL report. If you have closed the account it can be updated as closed account by the bank. If there are any inaccuracies in the credit report, the consumer can raise a dispute and can then get those corrected."
 
There are many credit 'repairing' firms that promise to remove for a fees the 'settled' remark from a CIBIL report. 'Settled' is a status reported on the loan account when the customer has partly paid the dues on the loan or credit card.
 
"However," the COO of CIBIL said, "this status cannot be changed unless the customer pays back all the dues and the loan or credit card is closed. Once the dues are paid in full the lending institution then report the status on this loan to CIBIL as 'Closed'. Also understand, CIBIL can only make changes to your report, once the lending institutions submit the updated or corrected data.
 
Ms Chandorkar then explained the process to correct inaccuracies in a CIBIL credit report. She said it can be done online by visiting CIBIL's dispute resolution page http://www.cibil.com/consumer-dispute-resolution. Here the person has to provide, name, address, date of birth, report control number (CN-mentioned on the CIBIL report) and the nature of dispute. "CIBIL’s Dispute Resolution Department then analyses and route the dispute to the lending institutions," she added.
 
Many people, who found that they have a low CIBIL score want to improve it overnight and often easily get lured to credit repairing agents. Ms Chandorkar says, "Your credit report and score is a reputational collateral. Cultivate financial discipline in order to enjoy all the benefits associated with it."
 
She then shared the six mantras to improve CIBIL score. Here are the six mantras...
 
1. Pay your loans, credit card bills or any other loans you may have availed in time
2. Do not over leverage yourself on credit- Apply for credit only when you really need it!
3. Maintain a healthy mix of credit
4. Monitor your co-signed, joint accounts monthly. 
5. Monitor the loan accounts for which you have stood as a ‘guarantor’
6. Review your credit score and history frequently
 
The session was followed by a lively, interactive session, where all the three speakers provided answers to several questions raised by attendees.
 

User

COMMENTS

SUNDARESAN

7 months ago

Very useful information

Remedies for recovery of company deposits
Every now and then, we come across cases involving public limited companies failing in their obligation to repay the deposits taken from investors. Presently, well-known companies like Helios & Matheson, Jaypee Associates and several others have badly let down thousands of small investors spread across the length and breadth of the country as they have failed to return the deposits due for repayment. Many of these companies have even failed to pay the interest due on those amounts.
 
A common question that is being raised by all the depositors is as to what are the options available to them for seeking relief against the defaulting companies so as to recover the amount due to them. They also want to know how to bring to book such companies and their directors who have virtually committed a fraud on investors, particularly as most of the depositors are small investors and don’t have the wherewithal to fight these large companies.
 
At the outset, it may be stated that in principle the Central Government treats the issue relating to acceptance and repayment of deposits very seriously and this is evident from the provisions in the Companies Act, 1956 (old Act) and 2013 (new Act). In fact, the new Act has imposed several conditions for acceptance or renewal of deposits including rating, creation of charge and providing insurance.
 
The provisions relating to acceptance and repayment of deposits under the new Act came in to force with effect from 1 April 2014. There have been significant changes effected in the new Act and the rules applicable to deposits. Companies that are unable to comply with these changes have no option but to refund the amount to the depositors as per the original terms and conditions subject to which the deposits were accepted by the company.
 
The issue on hand concerns few companies who had accepted deposits under the old Act and have now failed to repay the deposits in accordance with the terms of acceptance. In other words, all those companies who have committed default and are liable for action. Therefore, the question that needs consideration is as to what are the options available to an aggrieved depositor.
 
There are multiple options available to depositors who have to recover their amounts from the defaulting company. Under the Companies Act, 2013 a depositor is free to file an application under sub-section (4) of section 73 of the said Act, with the Company Law Board if the company fails to make repayment of deposits accepted by it. 
 
In fact, the said sub-section (4) clearly stipulates that when a company fails to repay the deposit or even a part of the deposit or any interest on such a deposit, the depositor concerned has a right to apply to the Tribunal (Company Law Board for the time being) seeking an order directing the company to pay the sum due to the depositor. He can also seek any loss or damage incurred by him as a result of such non-payment.
 
A depositor can also approach the District Forum or State Consumer Commission seeking redressal of his grievance. There has been a debate as to whether a person who gives money by way of deposit to a company under the Companies Act can be treated as a ‘consumer’ in terms of the provisions of the Consumer Protection Act.  There have been contrary views and at one time, even the National Consumer Disputes Redressal Commission (National Commission) was of the view that a depositor who gives deposit to a company is not a consumer.
 
However, the above issue now stands more or less settled with the National Commission upholding the right of a person to seek redressal as consumer under the Consumer Protection Act against the defaulting company to whom he had given a deposit. 
 
In M/s. Sunita Jain v/s Modern Threads (India) Ltd, decided on 16 January 2014, the decision of the National Commission rendered earlier in Mahesh Chandra Sharma Vs. M/s. Modern Threads (India) Ltd, decided on 10 October 2007 was quoted. Therein it was held that deposits made with the Company cannot be termed as loan and complaints were maintainable before the Consumer Fora.
 
Therefore, in view of the foregoing it would be possible to approach the Consumer Fora for seeking redressal against the defaulting companies. Though there is every possibility of the companies contending that a depositor is not a consumer under the Consumer Protection Act, but that argument will have to be rebutted effectively.
 
Aggrieved depositors can approach the Company Law Board seeking an order directing the company to repay the deposit and interest payable thereon for which the Board may draw up a schedule.
 
So far as criminal prosecution is concerned, unfortunately the relevant provisions in sections 74, 75 & 76A have not been made operational as the Tribunal is yet to be constituted by the Government.
 
However, prosecution may also be launched under the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 which has some stringent provisions. Though this Act refers to ‘Financial Establishment’ which has been defined as any person accepting deposit under any scheme or arrangement or in any other manner; it excludes a corporation, a co-operative society owned or controlled by any State Government or the Central Government and a banking company. In the past action has been taken under the said Act by the State Government against companies defaulting in repayment of deposits.
 
The tragedy of our country is that invariably, the victims are made to suffer, while the culprits go almost scot-free. It is going to be a long haul for depositors to bring these companies to book and recover their monies from the defaulting companies.
 
(Dr SD Israni is a corporate lawyer and a qualified company secretary has over three decades of experience in corporate, commercial and securities laws. He was a member of the Naresh Chandra Committee for simplification of company law and has been on SEBI’s committee on disclosures and the one on buy-back of shares.)
 

User

COMMENTS

Paddy U

5 months ago

would notifying SEBI help in case of listed companies.. and whether such defaulting companies can declare dividends??

NSRamakrishnan

7 months ago

UNITECH : I have written to Company Law Board, Also Registrar of Companies.As per the company's last communication dtd 13/2/15,their appln to company law board, we were expecting repayment from Sept. 15 onwards

u k saluja

7 months ago

Moneylife had done a brillant job by carrying out a survey on scam pertaining to corporate fds but response is good for nothing, Matter has been referred back to people who had done nothing despite writing ti them for yrs, submitting affidavit of debts for over two yrs, filed rti to mca, petitions to clb, orders issued but not complied in cases of micro technologies and avon corpn ltd (both gone into liquidations based on orders of Mumbai High court orders of winding up). According to list of winding up companies on court orders there are 1478 companies with liquidator Mumbai. Looking at the pace of deciding matters it would take atleast 50 yrs to settle claims. Companies wound up are from 1953 to 2016 (1478 nos). Why are companies permitted to raise Fds when they are not competent enough and financially strong to pay back money on maturity. This needs to be looked in by higher-ups. Thanks

S A Narayan

7 months ago

Its not as if an order from the Company law Board is the end of the issue. Elder Pharma despite a CLB order has not paid the depositors. So What next a contempt petition, again delay, more expenditure???

SuchindranathAiyerS

7 months ago

In other words, the remedy against crisis to approach an entirely unreliable judiciary who are erudition, integrity, arithmetic and culture challenged "Dormice" (as in Alice in Wonderland) for a remedy. You will spend , to recover every Rs 100/- of deposits, a lakh in legal fees and expenses and two lakhs in bribes.

Hiren Sagar

7 months ago

Very good effort please help us in getting media attention to this and help to get our money back

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