Governor Andrew M. Cuomo today signed legislation instituting new consumer protections for consumers using gift cards.
The bill (S.4771E / A.7610E), increases the minimum time before cards are charged a user fee, places additional restrictions on those fees, and expands the expiration dates of gift cards in order to protect consumers.
"These new protections will help prevent New Yorkers from being nickeled and dimed by hidden costs and fees," Governor Cuomo said. "No one expects an asterisk when buying a gift card and I'm proud to sign this legislation to help ensure consumers get their money's worth."
Under this new law, the time period in which fees can be charged to unused gift card balances has been increased from 13 to 25 months and any monthly service fees that are applied after this time must be waived if the consumer uses the gift card within three years of the issue date. In addition, this law will require the gift card's terms and conditions to describe exactly what the procedure is to replace a missing card. Finally, no gift card may now have an expiration date of earlier than five years from the date of issuance.
"Is there anything more frustrating than receiving a gift card for the holidays or a birthday, only to misplace it and learn later it is now worthless?" said Senator Rich Funke. "I think your money should be your money, whether it's lost in the couch cushion for a few months or not! That's why our new law will ban non-activity fees for two years, require clear disclosure of all terms and conditions, and waive all penalties when a lost card is found within three years. My thanks to Governor Cuomo and Assemblyman Dinowitz for helping to make this common sense solution the law of the land in New York State."
"Too often have consumers either purchased or been given a gift card, only to later find out that there is little to no money left to spend due to exorbitant fees assessed on the card due to inactivity," said Assemblyman Jeffrey Dinowitz. "Businesses selling gift cards have already made the profit of selling it, so there is no reason that a consumer should be penalized with fees for not using it within a specific time frame. It's simply unconscionable that a consumer who pays for a gift card in full should lose their investment because they waited to spend it."
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