WASHINGTON, DC – Colorado Attorney General John Suthers today announced a joint public/private initiative in conjunction with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), credit card companies and attorneys general from across the country to prevent the illegal sale of cigarettes over the Internet.
“This initiative is a multijurisdictional approach to protecting children from obtaining tobacco products illegally,” said Suthers. “Working together, this initiative will help keep tobacco products out of the hands of our children.”
Attorney General Suthers commended the credit card companies for agreeing to take affirmative actions to prevent the illegal sale of tobacco products over the Internet, and for agreeing to work cooperatively with law enforcement in shutting down these illegal operations.
“Too often, Internet sites cater to underage smokers,” said Suthers. “I am pleased with the willingness of these financial institutions to work together with state and federal law enforcement agencies to curb the growing problem of illegal cigarette sales over the Internet.”
Virtually all sales of cigarettes over the Internet are illegal because the sellers are violating one or more state and federal laws, including:
- state age verification laws;
- the federal Jenkins Act (which requires that such sales be reported to state authorities);
- state laws prohibiting or regulating the direct shipment of cigarettes to consumers;
- state and federal tax laws;
- federal mail and wire fraud statutes; and,
- the federal RICO law. Many of the sales made by foreign websites also violate federal smuggling, cigarette labeling, money laundering and contraband product laws.
Aside from being illegal, Internet cigarette sales present a significant risk to public health. In particular, cigarettes sold on the Internet are much cheaper than cigarettes sold by brick-and-mortar retailers, because the Internet sellers falsely advertise that their cigarettes are tax-free. Lower cigarette prices often lead to increased smoking rates, which in turn lead to more smoking-related illnesses and deaths.
Furthermore, while brick-and-mortar retailers check photo IDs to prevent children from buying cigarettes, the vast majority of Internet sellers have age verification systems that are inadequate, often simply requiring the purchaser to click a button stating they are of legal age. Numerous studies have shown that the earlier an individual begins to smoke, the more likely it is that the person will become addicted to smoking, and thus age verification through photo IDs is essential to protect children from a lifetime of addiction and smoking-related illnesses.
All credit card companies have long-standing policies that prohibit the use of their credit card for illegal transactions. During a meeting held today, state and federal authorities outlined the many laws that are being violated, and the companies agreed to take a variety of steps to ensure that their services are not used to facilitate these illegal transactions.
Among the actions some of the credit card companies have adopted to stop illegal online sales are:
- adopting policies to prohibit the use of credit cards for the illegal sale of cigarettes over the Internet; and,
- agreeing to investigate and take action with respect to any Internet sellers identified by law enforcement as using their credit cards for illegal online cigarette sales.
Other participating states include New York, California, Oregon, Pennsylvania, Vermont, Idaho, Louisiana, Maryland, New York and Wisconsin.