AGs block online tobacco sales

Legal News Line Sep. 19, 2008, 11:00am

Jerry Brown (D)

Lawrence Wasden (R)

LOS ANGELES (Legal Newsline)-California Attorney General Jerry Brown has teamed with attorneys general from New York and Idaho to prevent First Regional Bank from providing payment processing services to online retailers who illegally sale cigarettes over the Internet.

The California attorney general's office said the settlement agreement will block sales to minors.

"Stopping the illegal sale of cigarettes, especially to minors, is a major step in protecting public health," Brown said. "These online tobacco retailers are known to be a major source for young people to get their illegal cigarettes."

Brown, New York Attorney General Andrew Cuomo and Idaho Attorney General Lawrence Wasden conducted a joint investigation, which discovered that First Regional Bank processed online cigarette income across the United States.

The investigation included a "sting" against one of the largest online tobacco retailers, Scott Maybee, which also discovered the bank's processing of sales was against the law.

"We're pleased that First Regional has agreed to take measures to address this important issue and hope that other banks and companies involved in online tobacco sales will follow suit," Brown said.

Brown sued Maybee in June for violating laws designed to keep tobacco products out of the hands of minors. These laws include failing to call the customer after 5 p.m. to confirm the sale, failing to impose a two-carton minimum and failing to properly print "Tobacco Products" on the credit card receipt, according to Brown's office.

Under terms of the settlement, First Regional Bank will pay $60,000 in civil penalties, follow a formal policy prohibiting processing online tobacco sales and train its employees on the tobacco policy requirements.

Brown said this settlement fulfills California's Master Settlement Agreement, a public health accord designed to reduce the use of tobacco products among minors.

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