Recently, the prepaid industry has been under heavy scrutiny and with the addition of the Credit Card Accountability, Responsibility and Disclosure Act going into effect on February 22, 2010 even more provisions will apply to gift certificates, store gift cards and general-use prepaid cards. This article from Bankrate.com highlights how expiration and inactivity fees, for example, will be very limited. Customers can not incur inactivity fees on gift cards unless they go unused for a period of over 12 months.
There are however, certain fees that the CARD Act does not protect from like upfront issuance and sales fees. One aspect of fees that the CARD Act is particularly aiming to eliminate is expiration fees. The ACT demands that cards not expire for 5 years after its issuance; many gift cards at this time expire after 1 or 2 years.
What sort of changes do you foresee for AML regulations in the prepaid industry with these new provisions going into effect early next year?
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