Connecticut has been fighting for tougher federal laws on gift cards for the past five years. On Tuesday, Attorney General Richard Blumenthal said the state has won the battle.
The Federal Reserve has ruled that all gift cards, even those held by national banks, must uphold Connecticut’s gift card laws.
“The gift card companies have hidden behind the national banks, friendly federal bureaucrats, and now the Federal Reserve is saying no longer are states stopped from enforcing their laws simply because these gift cards are issued by national banks,” said Blumenthal.
Blumenthal said companies will be held accountable for violating state bans on unfair gift card practices like deadlines and charges. What that means for consumers is that they don’t have to rush to use their gift cards to avoid expiration dates and hidden fees.
“For consumers, who have lost millions of dollars every year because of these abusive restrictions, this new rule means all of that fine print, expiration dates, deadlines and fees is all no longer in effect,” said Blumenthal.
The new law will go into effect August 22, 2010, but Blumenthal said the law applies to gift cards now.