In a letter dated December 20th, 2004, State Senators Dean G. Skelos (R-Rockville Centre) and Charles J. Fuschillo, Jr. (R-Merrick) requested that New York State Attorney General Eliot Spitzer enforce a state ban on the assessment of certain gift card fees against the operator of Roosevelt Field Mall—Simon Property Group.
As authored by Senators Skelos and Fuschillo, the state ban prohibits the assessment of dormancy fees within the first 12 months of a gift card’s issuance and provides other disclosures/protections to gift card purchasers. Attorney General Spitzer filed the lawsuit in Manhattan State Supreme Court, alleging that fees on its "Simon Giftcard" violate the recently enacted state law.
Simon Property Group Inc. operates ten retail shopping malls and outlet centers, including the Roosevelt Field Mall in Garden City, the Mall at The Source in Westbury, the Walt Whitman Mall in Huntington Station and the Smith Haven Mall in Lake Grove.
Senator Dean Skelos said, "Last year, Governor Pataki and the State Legislature took aggressive steps to protect gift card purchasers from hidden fees that prevent them from getting what they paid for. I commend Attorney General Spitzer's decision to prosecute the Simon Group for illegally charging consumers ‘administrative fees' and other costs that clearly violate both the spirit of the law and its express provisions."
Senator Charles J. Fuschillo Jr. said, "The actions taken by Attorney General Eliot Spitzer in response to the request Senator Skelos and I made for an investigation as to whether or not the Simon Property Group was violating New York's gift card law are appreciated. When we amended the law, the intent was to ensure that consumers would receive the full value of gift card purchases and that their rights would be fully protected. I applaud the Attorney General for his actions today."
Attorney General Eliot Spitzer said, "The gift card law was enacted to protect consumers against hidden and unwarranted fees that diminish the balance of gift cards. Those who violate this important consumer protection law will face vigorous prosecution by my office."
At its shopping malls and on its website, Simon promotes and sells pre-paid gift cards. It charges a fee of $1.50 for each card if purchased at its malls or $5.95 for "shipping and handling" if purchased on the Internet. In addition, Simon charges a $2.50 monthly "administrative" fee commencing in the seventh month after purchase; a 50 cent fee for each telephone balance inquiry; a $5 fee to reissue a lost or stolen gift card; and a $7.50 fee to reissue an expired card.
The Attorney General's lawsuit charges that Simon's assessment of a monthly administrative fee on gift cards purchased after October 18th, 2004 violates the state law that bans monthly service fees on gift cards until the card has been unused for twelve full months. Also, the lawsuit alleged that Simon is violating another provision of the law by assessing a $5 fee to replace a lost or stolen gift card without conspicuously disclosing that fee on the gift card itself.
Individuals wishing to file a complaint about gift cards are encouraged to contact the Attorney General's office by calling his consumer help line at (800) 771-7755 or by visiting his web site at www.oag.state.ny.us.