The same rules apply to eGift Cards, but federal law requires eVouchers to expire no earlier than five years after the date the eGift Card is issued. Anti-money laundering rules. A final anti-money laundering rule for the prepaid card industry was published by the Financial Crimes Enforcement Network on July 26, 2011. This rule established suspicious activity reporting obligations and information collection obligations for customers and transactions in order to combat terrorist financing, money laundering and other illicit transactions related to stored prepaid cards. Issuers of closed-loop prepaid cards sold at least are exempt from the rule. Prepaid card issuers that do not fall within any of the exceptions or exclusions in the rule must maintain an anti-money laundering program if the prepaid cards fall within the scope of the final rule and certain conditions are met. Again, federal law requires that these fees be disclosed somewhere with the gift card. S.B. 150 provides that the sale or issuance of a gift card or gift card containing an expiration date or any type of fees or charges after the sale, including, but not limited to, service fees, inactivity fees, account maintenance fees, withdrawal fees, replacement card fees or activation or reactivation fees, is a prohibited method of unfair competition under the Unfair Commercial Practices and Consumer Protection Act 1976. is. as amended.
A person who retails goods and services cannot charge a customer an inactivity or other service fee for owning or using a gift card. Virginia H.B. 11 Prohibits a merchant who issues a Commonwealth-issued gift card from (i) charging a maintenance fee or inactivity fee on a gift card, or (ii) issuing a gift card that automatically expires, loses value, or is otherwise non-exchangeable. Gift certificates must contain a phone number or Internet address where the gift card holder can obtain information about their available balance. The measure applies to gift certificates issued on or after January 1, 2017. Texas Financial Code. The Texas Financial Code requires a person engaged in the transfer of funds to obtain a license from the Texas Department of Banking, unless an exclusion or exemption applies, or is an authorized delegate of a licensee (Section 151.302(a)). The sale of gift cards falls under the definition of “money transfer” in the Financial Code, which is defined as “the receipt of money or monetary value in any way in exchange for a promise to make the money or monetary value available at a later date or elsewhere”, which includes the sale or issuance of prepaid cards (Tex. Fin. Code § 151.301 b) (4)). Accordingly, the Texas Department of Banking considers gift cards and gift cards to be valuable products for licensing purposes.
Rule proposed by the CFPB. The CFPB, as an independent government agency empowered to enact rules and regulations to protect consumers, published on November 13, 2014, a proposed regime to extend full federal consumer protection to the prepaid card industry by extending the scope of EFTA to certain prepaid products. As suggested, the rule applies to prepaid accounts and other devices that can be used at unaffiliated merchants and does not apply to gift cards that can only be redeemed at a single merchant or group of affiliated merchants. Currently, the CFPB does not focus on closed-network payment products because, unlike open-loop prepaid cards, they cannot be used in place of traditional banking products, and consumers are less likely to load a significant amount of money onto closed-loop cards. The proposed scheme would amend EFTA Regulation E to require financial institutions to provide specific information to consumers before and after purchasing a credit account and restrict overdraft services and other credit features. Some industry reports suggest that the final rule will be released in May or June of this year. Connecticut H.B. 5473 This invoice requires a retailer who accepts a gift card as payment for goods or services to provide a cash refund if requested by the purchaser and that less than $1 remains on the gift card after purchase. Offences are punishable by a fine of $100 for a first violation, $200 for a second offence and $250 for each subsequent violation. Hawaii H.B. 2108 Requires the issuer of a gift card to hold in trust the funds received in payment of the card. Iowa H.F.
2088 retired 2/25/14 changes the unclaimed ownership requirements that apply to gift cards. Current legislation includes gift cards in the definition of “property” which are subject to the disposition of unclaimed property provisions of Chapter 556 of the Code. The Bill provides that, notwithstanding the provisions of section 556.2 of the Code that provide that intangible personal property not claimed by the owner more than three years after its maturity date or distributable is deemed abandoned, a gift certificate that is not subject to an expiry date or that is subject to any form of late payment fee or other fees or service charges may be presented indefinitely. and is not considered abandoned. S.F. 2296 Signed by Governor 4/10/14, Chapter 1089 Provides that funds represented by a gift card balance not presented within five years of the date of issue of the gift card are deemed to be forfeited, except for a gift certificate that can only be exchanged for goods that are not subject to an expiry date and that are not subject to deduction of the face value of the gift certificate, if the owner of the gift certificate has failed. The Gift Voucher for timely presentation of the Gift Card or subject to any other fees or service fees not presented will remain in effect and may be presented indefinitely and will not be subject to deemed waiver.
