Appendix F. Electronic Funds Transfer Act (EFTA)

(15 U.S.C. §1693 et seq.)

(as amended by the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, Public Law 111-24, 123 Stat. 1734)

§ 1693l–1. General-use prepaid cards, gift certificates, and store gift cards

(a)     Definitions

In this section, the following definitions shall apply:

(1)     Dormancy fee; inactivity charge or fee

The terms “dormancy fee” and “inactivity charge or fee” mean a fee, charge, or penalty for non-use or inactivity of a gift certificate, store gift card, or general-use prepaid card.

(2)    General-use prepaid card, gift certificate, and store gift card

(A)    General-use prepaid card

The term “general-use prepaid card” means a card or other payment code or device issued by any person that is—

(i)     redeemable at multiple, unaffiliated merchants or service providers, or automated teller machines;

(ii)    issued in a requested amount, whether or not that amount may, at the option of the issuer, be increased in value or reloaded if requested by the holder;

(iii)   purchased or loaded on a prepaid basis; and

(iv)    honored, upon presentation, by merchants for goods or services, or at automated teller machines.

(B)    Gift certificate

The term “gift certificate” means an electronic promise that is—

(i)     redeemable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo;

(ii)    issued in a specified amount that may not be increased or reloaded;

(iii)   purchased on a prepaid basis in exchange for payment; and

(iv)    honored upon presentation by such single merchant or affiliated group of merchants for goods or services.

(C)    Store gift card

The term “store gift card” means an electronic promise, plastic card, or other payment code or device that is—

(i)     redeemable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo;

(ii)    issued in a specified amount, whether or not that amount may be increased in value or reloaded at the request of the holder;

(iii)   purchased on a prepaid basis in exchange for payment; and

(iv)    honored upon presentation by such single merchant or affiliated group of merchants for goods or services.

(D)    Exclusions

The terms “general-use prepaid card”, “gift certificate”, and “store gift card” do not include an electronic promise, plastic card, or payment code or device that is—

(i)     used solely for telephone services;

(ii)    reloadable and not marketed or labeled as a gift card or gift certificate;

(iii)   a loyalty, award, or promotional gift card, as defined by the Board;

(iv)    not marketed to the general public;

(v)     issued in paper form only (including for tickets and events); or

(vi)    redeemable solely for admission to events or venues at a particular location or group of affiliated locations, which may also include services or goods obtainable—

(I)     at the event or venue after admission; or

(II)    in conjunction with admission to such events or venues, at specific locations affiliated with and in geographic proximity to the event or venue.

(3)    Service fee

(A)    In general

The term “service fee” means a periodic fee, charge, or penalty for holding or use of a gift certificate, store gift card, or general-use prepaid card.

(B)    Exclusion

With respect to a general-use prepaid card, the term “service fee” does not include a one-time initial issuance fee.

(b)     Prohibition on imposition of fees or charges

(1)     In general

Except as provided under paragraphs (2) through (4), it shall be unlawful for any person to impose a dormancy fee, an inactivity charge or fee, or a service fee with respect to a gift certificate, store gift card, or general-use prepaid card.

(2)    Exceptions

A dormancy fee, inactivity charge or fee, or service fee may be charged with respect to a gift certificate, store gift card, or general-use prepaid card, if—

(A)    there has been no activity with respect to the certificate or card in the 12-month period ending on the date on which the charge or fee is imposed;

(B)    the disclosure requirements of paragraph (3) have been met;

(C)    not more than one fee may be charged in any given month; and

(D)    any additional requirements that the Board may establish through rulemaking under subsection (d) have been met.

(3)    Disclosure requirements

The disclosure requirements of this paragraph are met if—

(A)    the gift certificate, store gift card, or general-use prepaid card clearly and conspicuously states—

(i)     that a dormancy fee, inactivity charge or fee, or service fee may be charged;

(ii)    the amount of such fee or charge;

(iii)   how often such fee or charge may be assessed; and

(iv)    that such fee or charge may be assessed for inactivity; and

(B)    the issuer or vendor of such certificate or card informs the purchaser of such charge or fee before such certificate or card is purchased, regardless of whether the certificate or card is purchased in person, over the Internet, or by telephone.

(4)    Exclusion

The prohibition under paragraph (1) shall not apply to any gift certificate—

(A)    that is distributed pursuant to an award, loyalty, or promotional program, as defined by the Board; and

(B)    with respect to which, there is no money or other value exchanged.

(c)     Prohibition on sale of gift cards with expiration dates

(1)     In general

Except as provided under paragraph (2), it shall be unlawful for any person to sell or issue a gift certificate, store gift card, or general-use prepaid card that is subject to an expiration date.

(2)    Exceptions

A gift certificate, store gift card, or general-use prepaid card may contain an expiration date if—

(A)    the expiration date is not earlier than 5 years after the date on which the gift certificate was issued, or the date on which card funds were last loaded to a store gift card or general-use prepaid card; and

(B)    the terms of expiration are clearly and conspicuously stated.

§ 1693m.        Civil liability

(a)     Individual or class action for damages; amount of award

Except as otherwise provided by this section and section 1693h of this title, any person who fails to comply with any provision of this subchapter with respect to any consumer, except for an error resolved in accordance with section 1693f of this title, is liable to such consumer in an amount equal to the sum of—

(1)    any actual damage sustained by such consumer as a result of such failure;

(2)

(A)    in the case of an individual action, an amount not less than $100 nor greater than $1,000; or

(B)    in the case of a class action, such amount as the court may allow, except that

(i)     as to each member of the class no minimum recovery shall be applicable, and

(ii)    the total recovery under this subparagraph in any class action or series of class actions arising out of the same failure to comply by the same person shall not be more than the lesser of $500,000 or 1 per centum of the net worth of the defendant; and

(3)     in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as determined by the court.

§ 1693n. Criminal liability

(a)     Violations respecting giving of false or inaccurate information, failure to provide information, and failure to comply with provisions of this subchapter

Whoever knowingly and willfully—

(1)     gives false or inaccurate information or fails to provide information which he is required to disclose by this subchapter or any regulation issued thereunder; or

(2)     otherwise fails to comply with any provision of this subchapter;

shall be fined not more than $5,000 or imprisoned not more than one year, or both.