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State regulators are again taking action against an e-cigarette company that just two years ago agreed to change its deceptive sales practices but appears to have changed only its name.
In 2014, the Division of Consumer Protection threatened to hit the e-cigarette company, Vapex LLC, and its owners with more than $822,000 in fines, alleging the company made unsubstantiated claims about the health benefits of its products and because it would make recurring $99.95 monthly charges to customers after promising its e-cigarettes were essentially free.
The company and its owners agreed to pay a much smaller fine $16,450 and refunded another $93,397 to disgruntled customers. They also agreed to stop the marketing that garnered so many customer complaints.
But two weeks ago, the division filed a new action against the company's owners, contending they were breaking many of the same laws in marketing e-cigarettes under the name O2PUR.
Not only is the division seeking penalties of $92,500 for the new violations, but it is also seeking to reinstate the original fines against company director Scott Barth that were waived as a condition of the previous agreement. All told, it could bring the penalties against the company to more than $900,000.
The state's initial action identified 90 customers who had complained about Vapex's tactics. The new action identifies an additional 16 complainants.
The company's ads were brought to the division's attention by the Connecticut-based watchdog group, Truth in Advertising, which received dozens of complaints from spurned consumers.
Laura Smith said alarms were sounded after the group heard a radio ad for O2PUR that sounded almost identical to the Vapex ads that had garnered the earlier complaints.
"This particular company was unique in that it was a repeat offender," Smith said. "Utah had already gone after the executives of this company and told them to knock it off."
In addition to the recurring charges to customers, the ads boasted about the health and financial benefits of using an e-cigarette versus regular cigarettes, and the Vapex ads had originally told customers they could use the devices anywhere they wanted.
"The goal obviously is to quickly and completely get rid of the deceptive marketing and compensate the consumers who have been deceived," Smith said. "We're happy to see the state has investigated and taken a step in the right direction, but the goal is to get the deceptive marketing taken down."
A hearing on the division's latest action will be scheduled in the near future. A message left for Barth on Friday was not returned.
A spokesman for the Division of Consumer Protection declined to comment, letting the legal filings speak for themselves.
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