WASHINGTON (AP) - The Federal Reserve issued new rules on
Tuesday to protect Americans from getting stung by unexpected fees
or restrictions on gift cards.
Gift cards have grown in popularity - with more than 95 percent
of Americans having received or purchased them, the Fed said.
And as usage has gone up, so too have complaints from people
taken by surprise by fees that eat into the value of the cards as
well restrictions on how long they'll be good for.
Under the rules, consumers must have at least five years to use
the gift cards before they expire. The Fed also says service or
inactivity fees can be imposed only under certain conditions.
Such fees can be charged if the consumer hasn't used the card
for at least a year, if the consumer is given clear disclosures
about them and no more than one fee is charged a month.
The rules take effect Aug. 22.
Congress ordered the Fed to issue the new protections under a
law enacted last year.
The Fed received more than 230 letters weighing in on its
proposal first unveiled in November.
Many individual consumers urged the Fed to ban all fees and to
eliminate expiration dates so that people didn't lose any value on
the cards.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
