Bass urging House hearing on gift cards
In response to three states suing the Simon Property Group, U.S. Rep. Charles Bass wants the federal government to take a closer look at gift cards.
The New Hampshire attorney general’s office sued the owner of the Pheasant Lane Mall on Monday, arguing that the company’s gift cards violate state law by having an expiration date and decreasing in value over time. Massachusetts and Connecticut have filed similar suits.
Simon Property Group has also filed a lawsuit in federal court seeking to have the gift cards subject only to federal regulations, and not state regulations.
Bass, a Republican, has asked the House Energy and Commerce Committee to hold a hearing on gift cards, saying he believes they should only go down in value when used to purchase goods or services.
“Although most consumer protection laws are not normally enforced at this level, our role is to ensure that companies are unable to sidestep laws enacted by states such as New Hampshire,” Bass said in a written statement. “This conflict between state and federal law illustrates a need for the federal government to address the consumer’s rights when purchasing gift cards affiliated with national banks.”
Under state law, gift certificates cannot expire or reduce in value through service charges, dormancy fees and other administrative charges
Customers face no fees if they use the Simon gift cards within six months. After six months, Simon charges a fee of $2.50 a month for the card, and after a year, it expires. Consumers can reinstate the card for $7.50.
Simon defended the cards this week, saying the charges cover the administrative fees for the card. The Simon Giftcard is a co-branded Visa card issued by the Bank of America.
The company sold more than $360 million worth of gift cards last year.