[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2969 Introduced in Senate (IS)]
108th CONGRESS
2d Session
S. 2969
Entitled the ``Fair Gift Card Act''.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 9, 2004
Mr. Schumer introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
Entitled the ``Fair Gift Card Act''.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fair Gift Card Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Gift certificate, store gift card, other prepaid
cards.--The terms ``gift certificate'', ``store gift card'',
and ``general-use prepaid card'' have the following meanings:
(A) Gift certificate.--The term ``gift
certificate'' means a written promise that is--
(i) usable at a single merchant or an
affiliated group of merchants that share the
same name, mark, or logo;
(ii) issued in a specified amount and
cannot be increased;
(iii) purchased on a prepaid basis in
exchange for payment; and
(iv) honored upon presentation by such
single merchant or affiliated group of
merchants for goods or services.
(B) Store gift card.--The term ``store gift card''
means a plastic card or other electronic payment device
that is--
(i) usable at a single merchant or an
affiliated group of merchants that share the
same name, mark, or logo;
(ii) issued in a specified amount and may
or may not be increased in value or reloaded;
(iii) purchased on a prepaid basis in
exchange for payment; and
(iv) honored upon presentation by such
single merchant or affiliated group of
merchants for goods or services.
(C) General-use prepaid card.--
(i) In general.--The term ``general-use
prepaid card'' means a card or other electronic
payment device issued by a bank or financial
institution, or by a licensed money transmitter
that is--
(I) usable at multiple,
unaffiliated merchants or service
providers, or at automated teller
machines;
(II) issued in a requested amount
whether or not that amount may be, at
the option of the issuer, increased in
value or reloaded if requested by the
holder;
(III) purchased or loaded on a
prepaid basis; and
(IV) honored, upon presentation, by
merchants for goods or services, or at
automated teller machines.
(ii) Exception.--The term ``general-use
prepaid card'' does not include a debit card
that is linked to a demand deposit or share
draft account.
(D) Exclusion.--The terms ``gift certificate'',
``store gift card'', and ``general-use prepaid card''
do not include a written promise, plastic card, or
other electronic device that is--
(i) used solely for telephone services; or
(ii) associated with a demand deposit,
checking, savings or similar account in the
name of the individual at a bank or financial
institution, and that provides payment solely
by debiting such account.
(2) Debit card.--The term ``debit card'' has the meaning
given that term under section 603(r)(3) of the Fair Credit
Reporting Act (15 U.S.C. 1681a(r)(3)).
(3) Financial institution.--The term ``financial
institution'' has the meaning given that term under section
603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)).
(4) Dormancy fee; inactivity charge or fee.--The terms
``dormancy fee'' and ``inactivity charge or fee'' mean a fee,
charge, or penalty for non use or inactivity of a gift
certificate, store gift card, or prepaid general-use card.
(5) Service fee.--The term ``service fee'' means a periodic
fee, charge, or penalty for holding or use of a gift
certificate, store card, or prepaid general use card.
(6) Licensed money transmitter.--The term ``licensed money
transmitter'' means a person who sells or issues payment
instruments or engages in the business of receiving money for
transmission or transmitting money within the United States or
to locations abroad by any and all means, including but not
limited to payment instrument, wire, facsimile or electronic
transfer.
SEC. 3. REGULATION OF UNFAIR AND DECEPTIVE ACTS AND PRACTICES IN
CONNECTION WITH GIFT CARDS.
(a) Imposition of Fees or Charges.--
(1) In general.--Except as provided for in paragraphs (2),
(3), and (4) it is unlawful for any person to impose with
respect to a gift certificate, store gift card, or general-use
prepaid card a dormancy fee, inactivity charge or fee or a
service fee.
(2) Exception.--A dormancy fee, inactivity charge or fee,
or service fee described in paragraph (1) may be charged with
respect to a gift certificate, store gift card, or general-use
prepaid card if--
(A) at the time the charge or fee is assessed the
certificate or card has a remaining value of $5 or
less;
(B) the charge or fee does not exceed $1;
(C) there has been no activity with respect to the
certificate or the card for at least 24 consecutive
months;
(D) the holder of the certificate or the card may
reload or add value to the certificate or the card; and
(E) the requirements of paragraph (3) are met.
(3) Requirements.--The requirements of this paragraph are
that--
(A) the certificate or card clearly and
conspicuously states in 10-point font--
(i) that a charge or fee described in
paragraph (1) may be charged; and
(ii) the amount of the charge or fee, how
often the charge or fee may be assessed, and
that the charge or fee may be assessed for
inactivity; and
(B) the issuer of the certificate or card informs
the purchaser of the charge or the fee before the
certificate or card is purchased, regardless of whether
the certificate or card is purchased in person, over
the Internet, or by telephone.
(4) Exclusion.--The prohibitions and requirements contained
in this subsection shall not apply to gift certificates that--
(A) are distributed pursuant to an award, loyalty,
or promotional program and with respect to which there
is no money or other value exchanged; or
(B) expire not later than 30 days after the date
they are sold and are sold below the face value of the
certificate to an employer, or to a nonprofit or
charitable organization for fundraising purposes.
(b) Limitations on Expiration Date.--
(1) In general.--Except as provided in paragraph (2), it is
unlawful for any person to sell or issue a gift certificate,
store gift card, or general-use prepaid card that is subject to
an expiration date.
(2) Exceptions.--A gift certificate, store gift card, or
general-use prepaid card may contain an expiration date if the
expiration date is not less than 5 years from the date the card
is purchased. Expiration terms must be prominently disclosed in
at least 10-point font and in all capital letters.
SEC. 4. RELATION TO STATE LAWS.
The Act and any regulations or standards established pursuant to
this Act shall not supersede any State law or regulation with respect
to charges, fees, and expiration dates of gift certificates, store gift
card, or general-use prepaid cards.
SEC. 5. ENFORCEMENT.
(a) Unfair or Deceptive Act or Practice.--A violation of this Act
shall be treated as a violation of a rule defining an unfair or
deceptive act or practice prescribed under section 18(a)(1)(B) of the
Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
(b) Actions by the Commission.--The Federal Trade Commission shall
enforce this Act in the same manner, by the same means, and with the
same jurisdiction, powers, and duties as though all applicable terms
and provisions of the Federal Trade Commission Act (15 U.S.C. 41 et
seq.) were incorporated into and made a part of this Act.
(c) Individual Cause of Action.--Nothing in this Act shall be
construed to limit an individual's rights to enforce a State law
relating to unfair or deceptive acts or practices.
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