Simon OKs partial agreement on gift cards

The state attorney general and the owner of three of New Hampshire’s largest shopping malls have agreed to settle a portion of a lawsuit filed by the state over the malls’ gift cards.

The attorney general’s office filed suit in November 2004, charging that Simon Property Group violated a provision of the Consumer Protection Act that forbids the selling of gift certificates that bear expiration dates or fees that reduce the value of the gift certificate. In its lawsuit, the state noted that the Simon card, a prepaid debit card sold at shopping malls owned or operated by Simon, has both an expiration date and fees that are charged against the value of the card.

Under the terms of the settlement, Simon has agreed to pay a total of $440,000 as restitution to consumers whose cards were debited to pay for the fees the state claims were illegal.

On Oct. 17, 2005, a Merrimack County Superior Court judge ruled that the gift card is a gift certificate under New Hampshire law, but withheld a ruling on whether the Consumer Protection Act applied to the card pending the outcome of a case in U.S. District Court in Concord.

There, Judge Steven McAuliffe later ruled that the Consumer Protection Act does not apply to those Simon Gift Cards that were issued after Sept. 1, 2005, but declined to rule on whether Simon gift cards sold prior to that date were subject to the act.

The state has appealed the McAuliffe ruling, with arguments expected to be heard in April.

The settlement announced Tuesday relates to those gift cards issued between Jan. 1, 2004 – the effective date of the gift certificate amendment to the Consumer Protection Act — and Sept. 1, 2005. – JEFF FEINGOLD

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