SALT LAKE CITY — The Utah Department of Commerce says three e-cigarette companies defrauded hundreds of customers out of money and made false claims about their products.
"They were doing a number of things," the department's executive director, Francine Giani, said. "All violations of the Utah Consumer Sales Practices Act."
According to actions filed by the department, Vapex in Holladay, Sinless Vapor in Heber City, and VaporXS in Phoenix, Arizona, all advertised free starter kits. The Internet ad listed them as being "risk free" for only the cost of $4.99 shipping.
"In fact, they weren't free," Giani said, "and the statute is very specific about that. If you're offering a free product, free means you pay nothing."
KSL could not find existing offices for Vapex or Sinless Vapor. A toll-free number was still taking customer service calls for Sinless Vapor when KSL asked to speak with management; an operator stated he was from a third-party call center.
Scott Barth, owner of Vapex, issued a written statement Wednesday that said a third-party marketing company did advertising for the company.
"In November, we discovered the marketing materials and practices being employed by this third-party vendor that had not been approved or disclosed to Vapex," the statement reads. "We immediately terminated all services provided by this subcontractor and discontinued all online consumer marketing."
The statement also said the company Vapex was dissolved sometime after the marketing discovery, but Vapex continues to work with the Department of Commerce to "rectify unintended outcomes."
Company websites also advertised that the e-cigarettes could be smoked almost anywhere.
"In airplanes and airports, restaurants and clubs, hotels and cruise ships, and work offices," one website stated, according to actions filed by the Department of Commerce.
"Some might think they violate the Utah Clean-Air Act," Giani said, referring to the claims.
Giani said VaporXS has reached a settlement with The Department of Commerce. She said the other two companies are still talking with them. Total fines levied against all three combined total about $1.1 million.