For Immediate Release
Media Contact: Bob Cooper
Date: December 30, 2008
Electronic Clearing House, Inc., Agrees to Stop Enabling Online Tobacco Sales
(Boise) - An electronic payments processor has agreed to stop handling transactions for the illegal online sale of cigarettes and other tobacco products. Attorney General Lawrence Wasden and the attorneys general of New York and California reached the settlement with Electronic Clearing House, Inc. (ECHO), of Los Angeles, California.
“Online tobacco retailers are a major source for young people to buy cigarettes illegally,” Attorney General Wasden said. “Stopping the illegal sale of cigarettes, especially to minors, is a major step in protecting public health. ECHO has acted responsibly in agreeing to stop processing payments for these illegal sales, and we hope other companies and banks involved in online tobacco sales will follow their lead.”
The three states began an investigation of ECHO following a lawsuit Wasden brought against Scott Maybee, one of the highest volume Internet cigarette sellers. Maybee was ordered to pay Idaho more than $160,000 for illegal Internet sales of millions of cigarettes into Idaho.
The investigation determined that ECHO was facilitating Maybee’s illegal cigarette sales by allowing him to process thousands of transactions through ECHO. Typically, ECHO bundles payments by merchant customers, such as Maybee, and submits them to the Automated Clearing House Network for electronic payment processing or to the Credit Card Networks. The investigation also uncovered evidence that ECHO knew it was facilitating Maybee’s illegal online tobacco sales in other states since 2006.
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