E-cig companies cop fines for health claims

A vaper exhales a puff of e-cigarette smoke as he walks past a car. Photo / Getty

Three e-cigarette companies have been ordered to pay a total of A$175,000 (NZ$187,000) in penalties for making false and misleading health claims, following legal action launched by the consumer watchdog.

In separate proceedings against online retailers Jostick, Social-Lites and Elusion, the Federal Court found all three companies misled consumers by claiming their products did not contain harmful carcinogens and toxins, when this was not the case.

The Australian Competition and Consumer Commission says it is the first time any regulator globally has successfully taken action for false and misleading claims about the presence of carcinogens in e-cigarettes.

The court found that the directors of Joystick and Elusion, and the chief executive of Social-Lites, were knowingly concerned in the contravening conduct of their respective companies.

Joystick was ordered to pay a penalty of A$50,000 and its director a penalty of A$10,000, Social-Lites a penalty of A$50,000 and its CEO a penalty of A$10,000, and Elusion a penalty of $40,000 and its director a penalty of A$15,000.

"Consumers were led to believe by this conduct that when using these e-cigarette products, they would not be exposed to the harmful chemicals found in ordinary cigarettes," ACCC acting chair Delia Rickard said. "In fact, they were exposed to the same chemicals, including a known carcinogen that has no safe level of exposure.

"Businesses must ensure that they provide accurate information to customers, and have a reasonable basis for making any representations. This is particularly important for products that may cause harm to the health of consumers."

The watchdog said it had written to more than 30 Australian e-cigarette suppliers reminding of their obligations under the law, in particular to ensure information provided to consumers is accurate.

The court action against Elusion and Social-Lites was launched in June last year, while the action against Joystick and its director came after the company failed to pay infringement notices issued by the ACCC.

The ACCC's case was based on independent testing which identified the presence of carcinogens and toxic chemicals, such as formaldehyde, acetaldehyde and acrolein in the products of Joystick, Social-Lites and Elusion, as well as acetone in Social-Lites' products.