Bullock: New Federal Gift Card Rules Bolster Montana’s Already Strong Laws
HELENA – As new federal rules designed to protect consumers go in to affect, Attorney General Steve Bullock on Thursday outlined what the new regulations mean for shoppers in Montana.
The new rules, which went into effect last week, extend expiration dates and limit fees associated with gift cards and gift certificates. The changes bolster Montana’s already strong laws and close some existing loopholes, all of which is good news for Montanans, Bullock said.
“With three young kids at home, I know firsthand how popular gift cards and gift certificates are for birthday presents and around the holidays,” Bullock said. “Unfortunately, far too often, consumers will throw them away if they think they’ve expired.”
While the new rules put federal limits on when a gift card or gift certificate can expire and what fees can be charged on cards that aren’t used immediately, Montana’s already strong laws prohibiting any fees or expiration dates remain valid.
Current law in Montana allows gift cards or gift certificates that have less than $5 remaining on them — but were originally valued at over $5 — to be redeemed for cash. Those laws will also remain unchanged.
The biggest change Montana shoppers will see, Bullock said, is strengthening of protections for holders of prepaid credit cards, like those from Visa and MasterCard.
Under a loophole in Montana law, gift cards that can be used with multiple sellers of goods or services, like those from a Chamber of Commerce or shopping center, or prepaid credit cards are not considered gift certificates. As such, in the past, consumers who didn’t use them immediately were often disappointed to find that they had expired or been eaten away by monthly fees.
The new federal rules close this loophole. Cards usable with multiple merchants and prepaid credit cards are now valid for at least five years from the date the card is purchased. And money added to a prepaid card must also be good for five years.
Some cards and coupons are not considered gift cards or certificates, and they can expire and are not redeemable for cash. These include prepaid telecommunications cards, like prepaid calling cards, and coupons provided to consumers as part of an award, loyalty or promotion program.
The new consumer protections are part of the Credit CARD Act (Credit Card Accountability Responsibility and Disclosure Act of 2009), passed by Congress and signed by the President last year.
Bullock encouraged businesses or consumers who have further questions to contact the Office of Consumer Protection at (800) 481-6896 or (406) 444-4500