[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 710 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 710

  To prohibit unfair or deceptive acts or practices relating to gift 
 certificates, store gift cards, and other general-use prepaid cards, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 25, 2009

  Mr. Schumer (for himself and Mr. Udall of Colorado) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
  To prohibit unfair or deceptive acts or practices relating to gift 
 certificates, store gift cards, and other general-use prepaid cards, 
                        and for other purposes.

    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 of 2009''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Debit card.--The term ``debit card'' has the meaning 
        given the term in section 603(r)(3) of the Fair Credit 
        Reporting Act (15 U.S.C. 1681a(r)(3)).
            (2) 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 general-use prepaid card.
            (3) Financial institution.--The term ``financial 
        institution'' has the meaning given the term in section 603(t) 
        of the Fair Credit Reporting Act (15 U.S.C. 1681a(t)).
            (4) General-use prepaid card, gift certificate, and store 
        gift card.--
                    (A) General-use prepaid card.--The term ``general-
                use prepaid card'' means a card or other electronic 
                payment device issued by a financial institution or 
                licensed money transmitter that is--
                            (i) redeemable at multiple, unaffiliated 
                        merchants or service providers, or automated 
                        teller machines;
                            (ii) issued in a requested amount whether 
                        or not that amount may, at the option of the 
                        issuer, be 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.
                    (B) Gift certificate.--The term ``gift 
                certificate'' means a written promise that is--
                            (i) redeemable 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.
                    (C) Store gift card.--The term ``store gift card'' 
                means a plastic card or other electronic payment device 
                that is--
                            (i) redeemable 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.
                    (D) Exclusions.--The terms ``general-use prepaid 
                card'', ``gift certificate'', and ``store gift 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 that--
                                    (I) is in the name of an individual 
                                or on behalf of an individual at a bank 
                                or financial institution; and
                                    (II) provides payment solely by 
                                debiting such account.
            (5) 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 payment 
        instrument, wire, facsimile, or electronic transfer.
            (6) Service fee.--The term ``service fee'' means a periodic 
        fee, charge, or penalty for holding or use of a gift 
        certificate, store gift card, or general-use prepaid card.

SEC. 3. UNFAIR OR DECEPTIVE ACTS OR PRACTICES REGARDING GIFT CARDS.

    (a) Prohibition on Imposition of Fees or Charges.--
            (1) In general.--Except as provided under paragraphs (2) 
        through (4), it shall be 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 may be charged with respect to a gift 
        certificate, store gift card, or general-use prepaid card if--
                    (A) such certificate or card has a remaining value 
                of $5 or less at the time such charge or fee is 
                assessed;
                    (B) such charge or fee does not exceed $1;
                    (C)(i) there has been no activity with respect to 
                the certificate or card in the 24-month period ending 
                on the date the charge or fee is imposed; and
                    (ii) the certificate or card was issued more than 
                24 months before such date;
                    (D) the holder of the certificate or card may 
                reload or add value to the certificate or card; and
                    (E) the disclosure requirements of paragraph (3) 
                are met.
            (3) Disclosure requirements.--The disclosure requirements 
        of this paragraph are met if--
                    (A) the gift certificate, store gift card, or 
                general-use prepaid card clearly and conspicuously 
                states in at least 10-point type--
                            (i) that a dormancy fee, inactivity charge 
                        or fee, or service fee may be charged;
                            (ii) the amount of such fee or charge;
                            (iii) how often such fee or charge may be 
                        assessed; and
                            (iv) that such fee or charge may be 
                        assessed for inactivity; and
                    (B) the issuer of such certificate or card informs 
                the purchaser of such charge or fee before such 
                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 prohibition under paragraph (1) shall 
        not apply to gift certificates that--
                    (A)(i) are distributed pursuant to an award, 
                loyalty, or promotional program; and
                    (ii) with respect to which there is no money or 
                other value exchanged; or
                    (B)(i) expire not later than 30 days after the date 
                they are sold; and
                    (ii) are sold below the face value of the 
                certificate to an employer or to a nonprofit or 
                charitable organization for fund-raising purposes.
    (b) Prohibition on Sale of Gift Cards With Expiration Dates.--
            (1) In general.--Except as provided under paragraph (2), it 
        shall be 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--
                    (A) the expiration date is not less than 5 years 
                after the date on which the card is purchased; and
                    (B) the terms of expiration are prominently 
                disclosed in all capital letters that are at least 10-
                point type.

SEC. 4. RELATION TO STATE LAWS.

    This Act and any regulations or standards established pursuant to 
this Act shall not supersede any provision of State law with respect to 
dormancy fees, inactivity charges or fees, service fees, or expiration 
dates of gift certificates, store gift cards, 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.
                                 <all>