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Retailers fined $28.5k for illegal online e-cig sales; unsold inventory seized

Posted by Matt Rowland on

As the debate continues over a possible ban of online e-cig sales in the United States and abroad, three underground retailers are already being slapped with an astonishing $28.5k in fines after officially being convicted in a court of law.  Perhaps even more alarming, approximately $10k of unsold inventory was also seized from their private homes and businesses. 

The state of Utah recently imposed a ban on online e-cig sales, and some local vendors assume that the new regulations are just a political scare tactic meant to squash growing citizen concerns over the unknown dangers of electronic cigarettes.  Other retailers are waiting to see if state officials will indeed prosecute potential violators to the highest extent of the law.   Then there are the majority of small business owners that tend to assume that illegally selling e-cigs online will only result a slight “slap on the wrist.”  Perhaps U.S. vendors should learn from the mistakes of three young Singaporeans who have recently had their entire lives turned upside down by not fully understanding the law.

Fines totaling $28.5k imposed by the Health Sciences Authority (HSA)

Two men and one woman were busted by the HSA for selling electronic vaporizers via social media and e-commerce sites to 23 different buyers.  Just last week, Charles Ng Teng Pei was fined $7,500, Teo Yi Lin received a $4,500 fine, and Koh Wei Hong got the largest financial penalty of $16,500. Hong made the double-mistake of selling to two 16-year old minors. 

(Related Article: STOP THE MADNESS! BOGUS USC ‘STUDY’ ON TEEN E-CIGARETTE USE GOES VIRAL)

How did they get caught?  Apparently the HSA has a very specialized cyber-surveillance system already in place that notifies the agency immediately after an online purchase is made.  Does Utah and other governments have this same sort of tracking and monitoring system?  Depending on the location, the system may be either more or less complex. 

Inventory seized as contraband may be more financially devastating

Singapore’s online ban of e-cig sales as been in place since 2011, and only thirteen people so far have been charged under the new law.  To date, the largest fine imposed on a single vendor is a whopping $64.5k.  But in almost all cases, the vendors’ in-house inventory was also seized as contraband, and the cost of the extra, unsold merchandise is usually far greater than the related fine. 

(Related Article: TWO NEW CONGRESSMEN ENDORSE COLE-BISHOP AMENDMENT TO FDA E-CIG REGULATIONS)

Meanwhile, the HSA also warns foreigners not to bring e-cigs and vaping devices into their country.  One can reasonably expect these products to be confiscated at the airport and perhaps the traveler being detained by the government for a short “interview.”  While the United States allows airline passengers to carry e-cigs and vaping devices in their carry-on and stored baggage, other federal governments may not be so vape-friendly. 

For retailers in states like Utah where a ban of online e-cig sales is already in place, advocacy groups warn vendors to read the new regulations thoroughly, especially if retailers want to continue selling e-cigs and vaping products online illegally.  The court-issued fine may only be a few hundred dollars, but read the fine print.  Can states like Utah also seize any unsold inventory?  Even if the regulations do not currently grant this authority, they can always be written or expanded quite easily at almost any time in the future.  And maybe without the local vaping community even knowing about it.

(Related Article: THE MINNESOTA $0.30 PER ML VAPE TAX IS BACK, AND WE MIGHT HAVE TO MOVE!)


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