Category Archives: Gift Cards

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CFPB Issues Final Rule to Regulate Prepaid Products; Prepaid Providers Given One Year to Comply

Yesterday the CFPB released a final rule that will impose a variety of consumer protection requirements on prepaid products, such as requiring specified disclosures before product purchase and compelling financial institutions to limit consumer losses for lost or stolen cards.  The CFPB had previously released a proposed rule, which we discussed here, and the final … Continue Reading

CFPB Director Cordray Testifies Before House Financial Services Committee

CFPB Director Richard Cordray testified before the House Financial Services Committee today, fielding questions and comments on an array of issues from the CFPB’s data collection practices to the Qualified Mortgage Rule, which went into effect on January 10, 2014. The hearing was scheduled in response to the CFPB’s release of its fourth Semi-Annual Report … Continue Reading

Consumer Financial Protection Bureau Issues Federal Preemption Determinations Regarding State Gift Card Laws

The Consumer Financial Protection Bureau (CFPB) recently released its final determinations concerning whether Maine and Tennessee unclaimed property laws were preempted by the federal gift card law prohibiting expiration of gift card funds within five years of issuance. The decisions represented the first time that the CFPB used its authority to issue preemption determinations. More … Continue Reading

CFPB Finds State Unclaimed Property Law Preempted by Federal Credit CARD Act

Last week, the Consumer Financial Protection Bureau (CFPB) issued its final determination regarding whether Maine and Tennessee unclaimed property laws were preempted by the federal Credit Card Accountability and Responsibility and Disclosure Act of 2009 (“the Credit CARD Act”). Both state laws provided that certain gift cards would be deemed abandoned as early as two … Continue Reading

Groupon Reaches Settlement in Gift Card Lawsuits

Last year, we discussed a class action lawsuit against Groupon alleging that the company’s deals violate California and federal gift card laws. The plaintiffs argued that Groupon’s deals constitute gift cards, and that the expiration on the deals violate federal and state laws that restrict expiration dates. Although Groupon denies they violated any law, the … Continue Reading

Court Approves Settlement in Gift Card Lawsuit

This week, a California Superior Court approved a settlement agreement in a class-action lawsuit alleging that Amway Corporation and its related companies violated gift card laws. Amway’s gift cards included a notation instructing consumers to "redeem before" a certain date. The plaintiffs argued that this notation violated a California law that prohibits expiration dates on … Continue Reading

Recent Lawsuits Allege Groupon and LivingSocial Violate Gift Certificate Laws

Last month, consumers filed a class action lawsuit against Groupon, alleging that the company’s deals violate California and federal gift certificate laws. This month, a similar lawsuit was filed against LivingSocial, alleging that the company’s deals violate Washington and federal gift certificate laws. Approximately half the states have laws that either restrict or prohibit expiration … Continue Reading

UPDATE: New Gift Card Rules To Take Effect on August 22, 2010 and Disclosure Requirements Will Now Take Effect on January 31, 2011

This is an update to an earlier post regarding the Federal Reserve Board’s final rules implementing the gift card provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (“CARD Act”). On July 27, 2010, H.R. 5502 was signed into law, extending the effective date of disclosure requirements under the CARD Act from … Continue Reading

Financial Reform Negotiations Conclude

After working through the night, the Congressional conference committee tasked with negotiating a final financial reform bill voted 27-16 to approve the bill and send it back to each chamber for a final vote on the conference report. Recaps of the long day and night of negotiations and the final bill are available from Poltico, … Continue Reading

RETAILERS: New Colorado Consumer Protection Law Requires Redemption of Gift Cards with a Cash Value of $5 or Less

On April 29, 2010, Colorado Governor Bill Ritter signed a consumer protection bill which requires gift card issuers to redeem the card, upon request, if the remaining value is $5 or less. In addition, it bans retailers, restaurants and others from selling gift cards that have any type of fee, including a service fee, a … Continue Reading

The Federal Reserve Board’s Final Gift Card Rules for the CARD Act

Recently, the Federal Reserve Board announced the final rules that amend Regulation E to implement the gift card provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (“CARD Act”). The rules restrict fees and expiration dates on various types of gift certificates and cards, and require sellers and issuers to make specific disclosures. These … Continue Reading

Federal Reserve Issues Gift Card Rules

Last week, the Federal Reserve Board announced final rules that restrict the application of fees and expiration dates to store gift cards, gift certificates, and general-use prepaid cards. The rules are issued under Regulation E and become effective August 22, 2010. The rules apply to gift certificates, store gift cards, and general-use prepaid cards, as … Continue Reading

REMINDER: New Credit Card Regulations Take Effect Today; Gift and Debit Card Rules to Follow

Major provisions of a new law related to credit and gift cards take effect today. The Credit CARD Act, which was signed by President Obama in May 2009, marked the culmination of several legislative efforts to reform certain practices of card issuers. The law provisions related to credit cards, discussed in this Kelley Drye client advisory, … Continue Reading

Skype Settles Class Action Over Expiration of Credits

Skype, a service that lets consumers make phone calls online, agreed to settle a class action that challenged the company’s policy of expiring credits that were older than 180 days. While Skype is free for consumers who call each other over the internet, there are fees associated with various additional features. To use these features, … Continue Reading

Plaintiffs File Suits Alleging Gift Cards With Expiration Dates In Less Than 10-Point Font Violate California Law

A number of class action lawsuits recently have been filed in California state court in San Diego County against a wide range of merchants as well as gift card issuers alleging, among other things, that the defendants have violated the California Civil Code by issuing gift cards that bear either an obscured expiration date, or … Continue Reading