Attorneys General from 14 U.S. states have sent a joint letter to payment processing companies. Including Visa, Mastercard, American Express, and Discover, demanding that these payment networks immediately assist in halting the sale of illicit vape products.
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Joint Letter Targets Payment Networks Over Illicit Vape Sales
On April 14, 2026. Attorneys General from 14 U.S. states sent a joint letter to the chief legal officers of Visa. Mastercard, American Express, and Discover, requesting their assistance in halting illicit vape transactions.
Illegal Vape Market Dominates U.S. Industry
The letter states that illicit vapes account for nearly the entire U.S. vape market share, generating annual retail sales exceeding $11 billion and representing over 80% of the nation’s total vape volume.
The Attorneys General noted that the FDA has currently authorized only 41 vape products for legal sale in the U.S., yet thousands of unauthorized brands continue to process transactions through the aforementioned payment networks.
Only a Limited Number of FDA-Authorized Vape Products
Although the U.S. Food and Drug Administration (FDA) has authorized just 41 vape products. The market remains flooded with unauthorized alternatives that continue to operate through mainstream financial systems.
Five Major Risks Identified in Illicit Vape Trade
The letter identifies five key areas of concern: public health, youth exposure, widespread retail availability, e-commerce distribution, and transnational criminal activity.
The Attorneys General emphasized that these products bypass FDA pre-market scientific review. Meaning their nicotine levels and chemical compositions have not been properly evaluated for public health safety. Many products also feature youth-targeted packaging, flavors, and marketing claims.
Widespread Retail and Online Distribution Channels
Illegal vape products are reportedly sold in over 100,000 retail locations across the U.S., including gas stations, convenience stores, and vape shops.
At the same time, e-commerce platforms continue to facilitate sales with weak age verification systems. These products are shipped via major carriers such as USPS, UPS, and FedEx, with some packages deliberately mislabeled to evade federal regulations under the PACT Act.
Links to Organized Crime and Money Laundering
The letter highlights concerns over transnational criminal activity, noting that federal investigations have linked illicit vape supply chains to money laundering networks. Mexican drug cartels and other organized criminal groups.
Pressure on Payment Platforms to Cut Off Illicit Merchants
The Attorneys General argue that payment processors and financial institutions play a critical role in enabling these transactions. As a result, they are being urged to take stronger action to identify and remove merchants engaged in illegal vape sales.
The letter states that such transactions violate card network rules on prohibited and high-risk merchant categories, requiring acquiring banks to fulfill Know Your Customer (KYC) and monitoring obligations, and terminate offending accounts.
Call for Immediate Action and Merchant Removal
The joint letter demands that payment platforms refuse service to entities involved in illicit vape sales once identified. It also calls for proactive monitoring, investigation, and removal of such merchants from their networks.
U.S. Urged to Seek Enforceable Trade Commitments with China
The Attorneys General further call on the Office of the United States Trade Representative (USTR) to secure binding commitments from China during trade engagements.
These include enforcing export controls to prevent unauthorized vape products from entering the U.S., ensuring accurate tariff classifications and origin declarations, and establishing transparent oversight mechanisms with measurable benchmarks.
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