Citizens' Issues
Now, govt. staff will have to declare assets annually

Its now mandatory for government servants to declare their assets annually. Section 4 of the RTI Act mandated transparency only in terms of their salary and compensation. Strangely, the new rules have not been pubicised

 

Section 4 of the Right to Information (RTI) Act mandates that salaries and compensation packages of government servants including officers from Indian Administrative Service/ Indian Police Service (IAS/IPS) cadre, be put up on the website of the relevant public authority. The notification issued last week by the  Department of Personnel & Training (DOPT) should come as a shock for government employees who have been amassing wealth, beyond their means. They will need to declare their assets by September this year and then by March or July, every year.

Every government employee is now required to file his annual returns pertaining to assets and liabilities, along with that of his wife and children, on a newly drafted declaration form. The notification is a sequel to the Lokpal and Lokayukta Act, 2013. The rules are termed as Public Servants (Furnishing of Information and Annual Return of Assets and Liabilities and the Limits for Exemption of Assets in Filing Returns) Rules, 2014.


As per the notification by the DoPT, this declaration has to be made by every government servant over and above other declarations as per his/ her services rules.

Section 3 (2) states...


(1) Every public servant shall make a declaration of his assets and liabilities under sub-section (1) of section 44 in the format specified in Appendix-1, along with information required under sub-section (2) or as the case may be, sub-section (3) and the annual return under sub-section (4) of section 44 in Forms I to IV specified in Appendix-II.

Every public servant shall file declaration, information or return, as the case may  be, regarding his assets and liabilities as on the 31st of March every year, to the  competent authority as referred to in clause (c) of sub-section (1) of section 2 on or before the 31st of July of that year.

Provided that the public servants who have filed declarations, information and annual returns of property under the provisions of the rules applicable to such public servants shall file the revised declarations, information or as the case may be, annual returns as on the 1st day of August 2014, to the competent authority on or before the 15th day of September, 2014.


The exemption clause is: “(4) minimum value of assets which competent authority may exempt from furnishing of information - …..if the value of such asset does not exceed four months basic pay of the public servant or Rs2 lakh, whichever is higher.’’

While this notification is the ultimate step towards transparency, Venkatesh Nayak, research scholar and activist, who has been working on matters about laws relating to transparency states that, this notification is deliberately not being made public and publicized. He says “According to the text of the gazette notification of the Rules, it was to be published in the Official Gazette on 14 July 2014. However this set of Rules has not been uploaded either in the Ordinary Gazette Section or the Extraordinary Gazette Section of the E-gazette website of govt of India (GoI). These Rules do not come up under the 'What's New' Segment of DoPT's website either. Instead, it is tucked away in the Circular Portal of GoI, which is password protected. However, readers may access it through Google by keying in the complete title of the Rules.”

 


The notification is of prime importance, considering that RTI applicants used to be stonewalled when they filed applications to procure information on disproportionate assets of government servants. Some of them used to file second appeals, while some Information Commissions ordered disclosure of information contained in the immovable property returns submitted by civil servants every year, others rejected the request upholding the official's right to privacy.

“In at least one case, an RTI activist in southern India who sought such information about a senior level officer, had to be provided armed security as the request snowballed into a public altercation between the two,” Nayak said.

Who else does the notification cover?

 

As per Nayak’s study these Rules cover every public servant. He says, “The Lokpal Act covers all categories of public servants in Section 14. These include the Prime Minister, Union Ministers, Members of Parliament, civil servants, employees and managers of public sector undertakings, universities, boards, trusts and societies or autonomous bodies wholly or partly financed by the Central Government and any organisation which receives foreign contribution of more than Rs10 lakh per year ($16,950 where 1$= Rs59) under the Foreign Contribution Regulation Act, 2010 (FCRA).

Does PM come under this notification?

 

According to Nayak, the Prime Minister is the competent authority for receiving declarations of assets and liabilities of the Union Ministers as per the Code of Conduct adopted first in 1964 and revised later in 1992 (4th attachment). “This Code does not require the Prime Minister to disclose his/ her assets to anybody. However, Section 44 read with Section 14 of the Lokpal Act, requires the Prime Minister also to publicly declare his/ her assets. So the Government will have to notify who the competent authority shall be to receive the PM's first declaration and subsequent annual returns under this Act and make them accessible to the public. Perhaps it should be the President as he alone is higher in the executive hierarchy to the PM. GoI must issue a clarification on this issue. It is not clear if the templates notified by the DoPT are intended for the use of 'public servants' other than 'civil servants',” he added.

Certainly, citizens would be looking forward to details of assets of government servants coming out in the public domain. Moneylife had recently carried a story on the disproportionate assets of Pune’s Divisional Commissioner Prabhakar Deshmukh. No action has been taken on this yet. He continues in his position and there are thousands of such cases all over India. Will the scenario change?

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COMMENTS

Rajesh

3 years ago

Those Government servants who wary and not comply in filing and disclosing their assets invite serious action under code of conduct. When Ministers , M.P.'s, MLA's and even those who just file elections declare their assets online, why such hesitation and delay?

Those who delay should be suspended and are welcome to resign as thousands of young talent has been waiting to get absorbed to these lucrative and full of benefits jobs.

Rajesh

3 years ago

Government employees in recent years have ben living lavishly with no accountability to public. They consider themselves to be belonging to special class and public in fact as their servants.

Kudos to Government for asking these details. Those who are known to have possessed income well disproportionate to their salaries need to be sent to jail without any delay.

K S Ashokan

3 years ago

How will the government enforce these provisions against the family members of the Public servant, who are not under governmental control. It is not known as to how the provisions for declaration of assets of the family members/dependents including spouse of the public servant can be enforced if the spouse who has independent earning refuses to divulge their savings/other assets citing "privacy".

Can the MCA Fix those Deposit-takers?
Indian companies seem to get away by not paying back public deposits. Will the newly active Ministry of Corporate Affairs under Nirmala Sitharaman start acting in the interests of the depositors?
 
The ministry of corporate affairs (MCA), which has a dynamic new minister in Nirmala Sitharaman, needs to pay attention to companies that continue to cheat people by failing to repay fixed deposits to investors. The new Companies Act has made corporate deposits a tad safer by tightening net-worth norms and mandating credit rating (to assess the ability to repay deposits). But it does not help those who are already trapped.
 
MCA does not believe in stopping wrongdoing when it happens; it seems to act only when there is a complaint after a default. So it does not seem to stop cash-strapped realty companies from issuing front page advertisements promising high guaranteed returns on deposits. Kumar Urban Development Private Limited is issuing unrated, unlisted NCDs (non-convertible debentures) of Rs100,000 each promising a gross yield of 21.94 %. This is being pushed by finance companies to their private wealth management customers, because they are paid fat commissions. There are scores of similar offers, all playing on the greed, ignorance and blind trust of depositors in their agents/ wealth managers.
 
Meanwhile, the number of companies reneging on payments is rising and, although MCA has a smart online complaints form, the grievance redress is slow or non-existent. It is entirely dependent on the company’s willingness to pay rather than the fear of punitive action by the government. 
 
A sub-broker Amrish Shah, fighting for his investors, says he has been running from the company law board (CLB) to the registrar of companies (ROC) without success. The CLB website www.mumbaiclb.com lists several of its orders asking companies to pay; but nothing happens. Here is list of his findings. 
 
Asian Electronics committed to CLB that it would pay in instalments but isn’t doing so. Elder Pharma, whose shares trade at nearly Rs200, has not repaid depositors. Plethico Pharma, which also trades at twice its face value, is delaying payments by as much as 10 months and won’t pay interest. Realty companies Unitech Ltd, Ansal Housing and Ansal Properties are struggling to pay depositors and delaying interest payments.
 
Companies, such as Ankur Drugs & Pharma, Raj Oils Limited, Tricom India, Micro Technology, Neesa Leisure (unlisted), are not paying interest. Neesa Technology (also unlisted) has issued NCDs of Rs100,000 each with IDBI Trusteeship Services as the debenture trustee. Then there is Helios & Matheson, a controversial company, which is not repaying small depositors. However, its shares trade at Rs85 and the bourses as well as regulators are reluctant to investigate it. The company gave  post-dated cheques to depositors and then stopped payment while promising to issue new cheques. Depositors are still waiting. 
 
And then there is the entire Yash Birla group, which is causing enormous distress to depositors, even while Yash Birla is busy with launching his autobiography and his wife is opening jewellery stores. However, there is at least some action in this case. Birla Power Solutions has had two bank accounts frozen by the economic offences wing of the Mumbai police. Zenith Birla is another group company that is not paying depositors in time. These complaints are also before CLB; the group itself is also in trouble with the tax authorities. 
 
Moneylife has repeatedly cautioned savers to avoid unsecured, corporate fixed deposits; unfortunately, they continue to be extremely popular among middle-class investors who do not realise that the best and safest companies which have myriad fund-raising options are unlikely to use the fixed deposit route.

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COMMENTS

murlidar

3 years ago

Plethico pharma was delaying the interest by a few days but now nearly 45 days have passed and no sign of quarterly interest on fds

murlidar

3 years ago

Plethico pharma was delaying the interest by a few days but now nearly 45 days have passed and no sign of quarterly interest on fds

murlidar

3 years ago

The authorities are also to be blamed for this mess. On one hand overnight the rules were made so stringent that all companies werte forced to stop execpting all fixed deposits. hence, the flow of cash by way of new deposits stopped and a deadline was given to refund all fds by 31 march 2015. Hence the management is less interested in servicing the existing fds and delay as much as possible.

murlidar

3 years ago

The authorities are also to be blamed for this mess. On one hand overnight the rules were made so stringent that all companies werte forced to stop execpting all fixed deposits. hence, the flow of cash by way of new deposits stopped and a deadline was given to refund all fds by 31 march 2015. Hence the management is less interested in servicing the existing fds and delay as much as possible.

REPLY

Dayananda Kamath k

In Reply to murlidar 3 years ago

rightly said. it is the unimaginative regulators that are responsible for indian financial mess let it be sebi, rbi,irda,fmc and mca actually they are the sponsors of all the financial scams

veeraraghavan

3 years ago

Respected Mam, Ministry of CA, please look in to these matter and solve this issue, we deposited the amount in order to get some extra income, in order to use this for house hold expense, this is my hard earned money.
L.veeraraghavan
9840135915

murlidar

3 years ago

MCA has appointed provisional liquidator for Micro Technologies and with that all responsibilities of management to return fd holders money seems to have ceased. These promoters have cleverly emptied the companies coffers and left the company to liquidators. The management should be held personally responsible and made to pay the fd holders.

Vaibhav Dhoka

3 years ago

Execution of order is need of hour in INDIA in any arena,as failure of execution has increased cheating many times as there remains no fear of law.This is true in judicial cases too.In short EXECUTION of order is naghtmare in India.

SUNIL KUMAR HEMNANI

3 years ago

A good article from a retail investors perspective .People wrongly get into companies and just suffer . Better to be safe than sorry . Getting a return on investment is good but having a capital is far more important . Thanks Moneylife for warning so many of us of some of the pit falls awaiting investors

Vaibhav Dhoka

3 years ago

Companies come out with new tricks and praposition to fool investors for example Neesa Liesure Ltd which issued advance cheques for maturity and interest to see that cheques are returned unpaid with bank leving cheque return charges.And all law enforsing agencies are burden on state exchequr in turn on public.ROC,mca 21 economic affence wing of concered jurisdiction and SFIO are of no help.So public should think twice before investment.

REPLY

Dayananda Kamath k

In Reply to Vaibhav Dhoka 3 years ago

it should be other way round people should make these authorities function for public good.By gheraoing the member of parliament and member of legislative assembly to look into the matter then only they will start functioning for public good.i have filed a complaint with cheif justice of india regarding how every authority has failed in their duty, long back.

Dayananda Kamath k

In Reply to Vaibhav Dhoka 3 years ago

it should be other way round people should make these authorities function for public good.By gheraoing the member of parliament and member of legislative assembly to look into the matter then only they will start functioning for public good.i have filed a complaint with cheif justice of india regarding how every authority has failed in their duty, long back.

ajaynetmail

3 years ago

Ajay
Leave alone the private company...how about Sardar Sarovar Narmada Nigam Ltd. which failed to deliver promised money to its deposit holders..if anybody has got full..plz enligthen about present status..

REPLY

Dayananda Kamath k

In Reply to ajaynetmail 3 years ago

i think there was put and call options in the scheme and the company exercised the options. idbi also did the same thing earlier. in their investors meet i raised the doubts as to their exercising the option, at that they avoided a clear reply and did the same thing. unless you understand the scheme properly there is every chance for feeling being cheated.

Dayananda Kamath k

3 years ago

as long as it is manned by secretaries who can not read and understand the communication received, what improvement you can expect. a complaint with caption a satyam in corporation bank is interprated as claim from investor protection fund. and even after clarifying he had the audacity to send the same reply with different reference number. what you can expect from mca. all the three ministers salman khurhid, veerappa moily and sachin piolot were informed but no action. hope the present minister will look into it.

Dayananda Kamath k

3 years ago

debenture trusteeship is also a big scam. i as an internal auditor of a nationalised bank had an opportunity to verify the same. the bank charged token fees to act as debenture trustee which is not enough even to cover the cost of holding a meeting of debentrue holders forget about legal costs for ensuring their right. and no clause to recover out of pocket expenses in the agreement. the agreement approved by legal department did not had the mandatory clauses prescribed by sebi. and funniest part is when i discussed it with legal officer who approved he was surprised that sebi has issued guidelines for such things and there are mandatory clauses. so to get other business involved in issue they are compromising the interest of debeture holders. surprisingly no action was initiated on the report. subsiquently i was not given such assignments.

u k saluja

3 years ago

Thanks for writing a timely article on "Can MCA fix those deposit takers". A reference to the orders passed by CLB Mumbai would reveal that many mumbai based companies like Micro Technologies, AVON Corporation Limited having been taking small investors for a ride by promising attractive rates of interest and thereafter not paying back their money on the committed dates. AVON was extending validity of FDs on their own from one year to five years without seeking consent of the investor. Now these companies have gone into liquidation and the investors are now required to submit petitions to MCA/CLB (SEBI does not intervene) for which status given is either "closed" or "work in progress" for months. People at the helm of affairs in MCA must intervene and help small investors especially senior citizens on priority and save them from such unprincipled managements. Thanks.

Sucheta Dalal

3 years ago

At Moneylife Foundation we strongly advise people not to go for fixed deposits other than those of AAA rated companies. Then too we tell them keep a watch.

We also point out that companies who offer 3% more than Bank FDs or 2% more and gifts are desperate and dangerous. Do not listen to agents who tell you otherwise.

But people don't listen. If you are from mumbai do attend our FREE financial literacy seminars. we do not promote any product or service.

Or just watch the videos at http://foundation.moneylife.in under EVENTS

REPLY

Prashant

In Reply to Sucheta Dalal 3 years ago

Is there any possibility of getting the amount back from Helios and Matheson. I have written to MCA but there is no reply. Is there anything further we can do?

Dayananda Kamath k

In Reply to Prashant 3 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

Dayananda Kamath k

In Reply to Prashant 3 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

Dayananda Kamath k

In Reply to Prashant 3 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

Dayananda Kamath k

In Reply to Prashant 3 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

Dayananda Kamath k

In Reply to Prashant 3 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

Dayananda Kamath k

In Reply to Prashant 3 years ago

mca is the most illiterate in company law matters and they do not understand the english. and now govt is not including english marks to decide the merit for elegibility.

veeraraghavan

In Reply to Prashant 3 years ago

i have submitted the bounced cheque, to office of helios and matheson for new cheque, have u submitted, please tell me on further feedback

ss makhni

3 years ago

Fail to understand why Brokers like Bajaj Capital reccomended Micro Technologies for fixed deposits without any proper research, and then delayed any action for one year to initiate any company law board proceedings. There is very little possibility of recovering principal and interest.

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 TINA.org 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.

 


TINA.org’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 TINA.org 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 TINA.org 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.


TINA.org’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 TINA.org 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 vapexecig.net 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, TINA.org 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 TINA.org would file a complaint with the FTC and Utah Attorney General. Vapex did not respond. (See TINA.org’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, VaperXS.com and TriVaper.com haven’t been active since January.

 

However, FTC records obtained by TINA.org 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. TINA.org could find only two states that took action to protect consumers against purchasing scams.

In 2011, Arizona went after Smoke Freely, LLC (aka smokefreely.com 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 TINA.org, which will continue to cover deceptive e-cigarette marketing claims.

 

Courtesy: TruthInAdvertising.org

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