The Consumer Financial Protection Bureau wants to make sure inactive gift card holders in Tennessee and Maine aren't getting shortchanged.
The federal consumer watchdog on Thursday asked for public opinion on whether unclaimed property laws as they relate to gift cards in those two states are inconsistent with federal law on gift card expiration dates.
The Credit Card Accountability, Responsibility and Disclosure Act, or CARD Act, for short, of 2009, mandated that a gift card can't expire until five years after issuance or from the date it was last loaded with new funds, whichever comes later. The expiration date also should be clearly disclosed on the card.
However, in Tennessee and Maine, unused gift cards fall under those states' unclaimed property laws, which stipulate that certain gift cards are considered abandoned property if they aren't used for two years.
The CFPB is charged with dealing with these inconsistencies in law and determining if the state laws are more or less consumer-friendly than the federal law. Seems like a no-brainer to me. While the agency mulls over this very difficult debate, it also wants you to weigh in on the discussion. Comments can be submitted on the CFPB's website.
While we're talking about gift card rules, there are some gift cards that aren't covered by the expiration law. Paper gift certificates, reloadable prepaid cards such as Visa or American Express prepaid cards, and telephone cards along with loyalty, award or promotional gift cards are exempt from these rules.
The other beneficial change ushered in by the CARD Act regarding gift cards is the limits on fees. Gift cards and gift certificates can levy inactivity or dormancy fees only after 12 months of no use. At that point, just one fee can be charged per month. The inactivity fee and its terms must be disclosed in advance to the user.
But watch out for other fees that aren't regulated by the CARD Act. Always read the fine print to know what you're getting.
How do you think the CFPB will rule on the gift card law inconsistencies?
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