Senator Charles J. Fuschillo, Jr. (8th Senate District), Chairman of the Senate’s Consumer Protection Committee, announced today that after an investigation into Simon Property Group, Attorney General Eliot Spitzer reached a settlement with the mall operator with regard to its gift card policy. The investigation was in response to a request that Senator Fuschillo made, along with Senator Dean G. Skelos (9th Senate District), after learning that Simon Property Group violated New York State’s recently enacted gift card laws.
"This is a clear sign to gift card providers that New York State is serious about protecting its consumers. The gift card laws have been in effect since October and these laws must be adhered to if companies wish to do business in this state," stated Senator Fuschillo. "I will not hesitate to call on the Attorney General, as I have done so in regard to Simon Property Group, when there is a clear violation of the law. I applaud the Attorney General for his swift and effective action."
According to the Attorney General’s office, Simon Property Group has agreed to pay the state $100,000 in penalties and $25,000 in costs as part of the settlement. The company also has agreed not to assess aservice fee on any card unless it has been unused for at least twelve months, thereby complying with New York State law. Such fees have been against New York State law since October, when legislation jointly sponsored by Senator Fuschillo and Senator Skelos went into effect.
In their request to the Attorney General, Senator Fuschillo and Senator Skelos provided information which showed that Simon Property Group had informed customers that the company would charge a $2.50 monthly fee only seven months after gift cards purchases made through its website and in the malls it operates. These fees, which diminish the value of a gift card, are commonly referred to as dormancy fees and are now banned for an entire year on any unused gift card under the new law authored by Senator Fuschillo and Senator Skelos.
Simon has also agreed to disclose on its gift card the five dollar fee it charges to replace a lost or stolen card, and the $7.50 fee it charges to reissue an expired card. The fees are not prohibited in New York State but they must be conspicuously disclosed on gift cards.
The full disclosure component of the gift card law, which Senator Fuschillo and Senator Skelos also co-authored, requires retailers to clearly state all the terms and conditions regarding gift cards and gift certificates. These terms and conditions, by law, must include certain information on the gift card itself including any expiration date, any fees and whether a replacement will be issued for lost, stolen or destroyed gift cards and certificates.
"The intent of the gift card laws, which have been in effect since last October, is to make sure that individuals who buy gift cards know what they are spending their money on and know that their purchase will retain its value," said Senator Fuschillo.
Simon Property Group operates the Roosevelt Field Mall in Garden City, the Source Mall in Westbury, the Walt Whitman Mall in Huntington Station and the Smithhaven Mall in Lake Grove.
Anyone who would like to file a complaint about gift card violations is encouraged to contact the Attorney General’s office by calling (800) 771-7755 or by visiting Senator Fuschillo’s website at www.senatorfuschillo.com andclick on the link in the Senate Update section.
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