Federal Rules Banish Hidden Fees From Gift Cards

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    The Federal Reserve is restricting how merchants apply fees and expiration dates to their gift cards.

    Gift card hoarders, your prayers have been answered.

    Later this year, federal regulators are restricting how merchants apply fees and expiration dates to their gift cards.

    Under the new rules, shoppers must be able to use their gift cards for at least five years before they can expire.

    Regulators Crack Down on Gift Card Abuses

    [DFW] Regulators Crack Down on Gift Card Abuses
    The Fed is restricting how merchants apply fees and expiration dates to gift cards.

    The Federal Reserve is also targeting hidden fees. Companies will only be able to charge service or inactivity fees if the card hasn't been used in at least a year, if no more than one fee is charged per month and if customers have been given clear disclosures about the fees.

    Tom Carter, an attorney for the Federal Trade Commission's Dallas office, praised the rules.

    "Consumers have enough information to make informed decisions in the marketplace, and if these folks that put out the cards, if they don't adequately disclose that they have fees, than people are deceived."

    The rules take effect Aug. 22. Congress ordered the Fed to issue the new provisions under a law enacted last year.

    Julie Castro, who tends to stash away her gift cards in a drawer, said she is happy regulators are cracking down.

    "I don't think that's fair, so I'm glad they're doing something about it," she said.