December 21, 2010

New Federal Law Protects Gift Card Users

Under the 2009 federal Credit Card Accountability Responsibility and Disclosure Act, gift card issuers cannot charge dormancy, inactivity, or service fees unless the fee terms were clearly disclosed to consumers before they bought the card and the card has been inactive for more than 12 months. Even then, only one fee may be charged each month. The cards also cannot expire for at least five years after they are issued. The law took effect August 22, 2010.

In addition to the federal law, some states, including Connecticut, provide additional consumer protections for gift card users. The National Council of State Legislatures has produced a chart with state gift card statutes and recent legislation.