Gift-card abuse crackdown proposed
Published: November 16, 2009
Updated: November 16, 2009
WASHINGTON -- The Federal Reserve today proposed new rules to protect consumers from unexpected costs or restrictions on gift cards.
More than 95 percent of Americans have received or purchased gift cards, the Fed said.
Under the proposed rule, consumers must have at least five years to use the gift cards before they expire. The Fed also said service or inactivity fees can be imposed only under certain conditions.
Such fees can be charged if the consumer hasn't used the card for at least a year, if the consumer is given clear disclosures about them and no more than one fee is charged a month, the Fed said.
The Fed was directed to take the action under a law Congress passed in May.
The public, industry groups and other interested parties can comment on the Fed's proposal, which could be revised before a final rule is adopted.
The Fed said the new provisions are slated to take effect on Aug. 22.
-- The Associated Press
Reader Reactions
Thank you, SpacemanSpiff. This issue makes more sense to me now.
Hey, Walker…This is not your father’s Fed.
The nation is slowly moving to having some competence and integrity. It is going to be difficult but this is a tiny step toward controling the band of crooks that call themselves “finance professionals” and bankers.
It’s not just the Federal Reserve that’s taken interest in gift cards.
Some states have made noise about wanting companies to treat unused gift cards as “unclaimed property,“ the same way that stale checks and unclaimed deposits are. Of course, what this really means is that the companies have to send the value of the unused gift cards to the state in question, who then “attempts” to find the owner. In the end, though, the state as often or not ends up with the cash.
Oh good grief! With all the important matters the Federal Reserve must contend with in our current economic environment, they are worried about consumers and their gift cards??? I’d love to hear some rationale for that.
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