Fed issues new gift card regulations - WKOW 27: Madison, WI Breaking News, Weather and Sports

Fed issues new gift card regulations

By Dan Cassuto - bio | email | Twitter | Facebook | Blog  | 

WASHINGTON (WKOW) -- American consumers will soon see increased protections of their unused gift cards.

The Federal Reserve has issued new rules to fight unexpected fees and restrictions.

Under the new regulations, which go into effect Aug. 22, retailers must give consumers at least five years to use the gift cards before they expire.

The Fed also says service or inactivity fees can only be imposed under certain conditions, for example if a consumer hasn't used the card for at least a year, if the consumer is given clear disclosures and if no more than one fee is charged per month.

27 News Call for Action reporter Dan Cassuto spoke with Madison consumer lawyer Jeff Archibald, who calls this a "great move" by the Fed.

"I'll go ahead and say it, I think [consumers] were getting ripped off," he said. "Certainly for Wisconsin consumers, it's a good day."

Archibald said that his office gets a lot of calls about gift card, saying that they often expire by the time consumers try to used them.

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