STATE OFFICERS AND EMPLOYEES; CONSUMER PROTECTION; ABANDONMENT OF PROPERTY;

PROPERTY;

Connecticut laws/regulations;

You asked for a summary of the portion of An Act Concerning Expenditures and Revenue for the Biennium Ending June 30, 2005 (PA 03-1) concerned with gift cards and certificates.

SUMMARY

By law, most property held or owed in this state and remaining unclaimed by the owner is presumed abandoned after a specified amount of time passes. The state treasurer assumes custody and is responsible for any ownership or other types of property claims.

The act rewrites the law concerning all types of unclaimed property, including the law concerned with gift cards and certificates. Among its changes, it specifically states what was generally true before the act passed. That is, gift cards and certificates are subject to the unclaimed property law. The act establishes necessary record-keeping requirements relating to gift cards and certificates.

Concerning gift cards and certificates, the act prohibits (1) charging dormancy fees or similar charges and (2) setting an expiration date.

UNCLAIMED PROPERTY

By law unchanged by the act, property in this state that is held or owing in this state and unclaimed after three years is presumed abandoned, unless excluded by law (CGS § 3-64a). The law establishes the circumstances under which intangible property is subject to state custody as unclaimed property (CGS § 3-66b). The holder of such abandoned property must, two years after the property is unclaimed, notify the property owner that he must state his interest in the property or it will be sent to the state treasurer. The notice must be sent by first-class mail to the owner’s last-known address.

Within 90 days after the close of the calendar year in which the property is deemed abandoned, the holder must send it to the state treasurer with a report that must include, among other things; (1) the owner’s name, if known, and address, if any; (2) the name, identifying number, or description of the property; and (3) the date of the last transaction with the owner involving the property (CGS § 3-65a).

The treasurer must publish in a newspaper a notice of all unclaimed property every two years. The notice must include the names and addresses of the people reported as owners (CGS § 3-66a). Anyone asserting ownership of the property may make a claim on it with the state treasurer (CGS § 3-70a).

GIFT CERTIFICATES AND CARDS

The act specifies that the value of a gift certificate is presumed abandoned if it is not redeemed within three years after (1) its purchase or issuance date or (2) the last date of a transaction that increased or decreased its value, whichever is later.

The act defines a gift certificate as a record showing a promise by the seller or issuer, made for consideration, that goods or services will be provided to the owner to the value shown in the record. This includes, but is not limited to, a (1) record that contains a microprocessor chip, magnetic stripe, or other means to store information that is prefunded and for which value is decreased with use; (2) gift card; (3) electronic gift card; (4) stored value card or certificate; (5) store card; or (6) similar record or card.

The act defines a “record” as information inscribed on a tangible medium or stored in an electronic or other medium and retrievable in perceivable form.

Dormancy Charges

The act prohibits dormancy charges or fees, abandoned property charges, unclaimed property charges, inactivity charges, or any similar charge, fee, or penalty for inactivity on gift cards and certificates. Further, neither the certificate nor an agreement concerning it may contain language suggesting that it may be subject to charge.

Expiration Dates Prohibited

The act prohibits anyone from selling or issuing a gift certificate with an expiration date and prohibits the gift certificate or an agreement from having language suggesting that an expiration date may apply. A violation is deemed to be an unfair or deceptive trade practice (See below).

Record-Keeping

The act requires anyone who sells or issues a gift certificate to get and maintain the owner’s address. If there is no record of the owner's address, the treasurer's address is used.

Reimbursement to the Holder

The act states that it must not be construed to prevent a holder of unclaimed property from honoring a gift certificate, the unredeemed value of which has been sent to the state treasurer, and then seeking reimbursement from the treasurer.

UNFAIR OR DECEPTIVE ACTS OR PRACTICES

The Connecticut Unfair Trade Practices Act (CUTPA) prohibits businesses from engaging in unfair or deceptive acts or practices. CUTPA allows the consumer protection commissioner to issue regulations defining what constitutes an unfair trade practice, investigate complaints, issue cease and desist orders, order restitution in cases involving less than $ 5,000, enter into consent agreements, ask the attorney general to seek injunctive relief, and accept voluntary statements of compliance. The act also allows individuals to bring suit. Courts may issue restraining orders; award actual and punitive damages, costs, and reasonable attorneys fees; and impose civil penalties of up to $ 5,000 for willful violations and $ 25,000 for violation of a restraining order (CGS §§ 42-110a et seq. ).

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