Payment Processors Pressed by Attorneys General Over Unauthorized E-Cigarettes
A bipartisan coalition of state attorneys general and New York City is pushing major card networks and payment platforms to help stop underage purchases of vaping products and other nicotine or tobacco products sold outside the law.
Key Developments: Attorneys General Target Youth Vaping Sales
| Action | Participants | Date | Purpose |
|---|---|---|---|
| Urged payment companies to curb unlawful e-cigarette and tobacco product sales to minors | Multistate coalition of attorneys general and New York City; nine credit card and payment companies | Last week | Limit unlawful transactions tied to underage access |
| Sent letters requesting meetings to address unlawful transactions | Coalition representing 25 attorneys general; American Express, Capital One, Citigroup, Mastercard, Visa, PayPal, Stripe, Sezzle, and Block | April 28 | Set times for meetings to “comprehensively” address unlawful transactions |
| Pressed firms to strengthen safeguards for online and in-store sales | Attorneys general coalition and nine credit card and payment companies | Not specified | Reduce illegal tobacco and vaping product sales and improve compliance controls |
Why Payment Companies Matter in Tackling Illegal E-Cigarettes
Attorneys general nationwide are enlisting payment companies as enforcement partners to limit youth access to tobacco products, nicotine, and e-cigarette items. The coordinated effort aligns with ongoing federal, state, and local initiatives to deter young people from using vaping products, the release noted.
Payment intermediaries can interrupt unlawful sales at the point of transaction by setting clear merchant rules, monitoring risk signals, and cutting off repeat violators.
New York City and the attorneys general of California, Pennsylvania, and New York led the campaign, while additional attorneys general joined by signing the letters.
The correspondence stated that the Centers for Disease Control and Prevention has found any youth use of tobacco products to be unsafe; however, the link cited in the letters did not point to that determination on the agency’s website.
The coalition also referenced earlier actions by some members challenging Shopify, a Canadian e-commerce company, over unlawful e-cigarette sales facilitated on its platform.
Beyond payment restrictions, enforcement efforts against illegal sellers can include investigations and undercover purchases, civil lawsuits seeking injunctions, product seizures, and monetary penalties. Depending on the conduct and jurisdiction, repeat or large-scale violations can also expose sellers and facilitators to broader legal consequences, including loss of licenses and, in some cases, criminal charges.
Federal oversight also plays a role. The Food and Drug Administration regulates e-cigarettes as tobacco products, including reviewing whether products may be marketed and taking action against items sold in violation of federal requirements. Agency tools can include compliance warnings, civil money penalties, product seizures, and court-ordered injunctions aimed at stopping unlawful distribution.
Public health officials have also raised concerns that illegal or unregulated vaping products may carry unknown nicotine levels or contain contaminants, and that they can increase the risk of addiction among young users. The officials have said youth-oriented tactics can include discreet device designs, disposable formats, and marketing that blends into social media and youth culture.
California Attorney General Rob Bonta said illicit e-cigarette sales remain widespread and pose a serious public health risk. He emphasized that financial service companies must ensure their systems are not used to enable these transactions and urged nine major card brands to help protect communities, especially children.
The letters also highlighted shipping and delivery restrictions that can affect how vaping products move through commerce, including limits tied to postal channels for sending such products to consumers. Officials say these restrictions are intended to reduce direct-to-consumer access, while illegal sellers may attempt to route packages through alternative delivery methods, complicating detection and enforcement.
The letters cited the Prevent All Cigarette Trafficking Act of 2009 and pointed to additional state and local measures that can include licensing rules for retailers, compliance checks, and penalties that escalate for repeat violations.
- Age verification requirements
- Labeling and weight rules
- Compliance with state, local, and tribal regulations
- State flavor restrictions
Supporters of these restrictions say they can reduce youth access, while critics have argued that bans and tight limits can shift demand toward illicit sources, create enforcement challenges, and produce unintended consequences for adults who use regulated products as alternatives to cigarettes.