Thursday, January 20, 2011
The new data collection mandates, signed into state law in June 2010, force issuers of such stored-value products as gift and rebate cards to collect and maintain certain data on card purchasers, such as names and addresses. By issuers keeping this data, New Jersey expects to claim more of the leftover balances remaining on gift cards purchased in New Jersey, which reportedly could increase state revenues by nearly $80 million in 2011.
The American Express Prepaid Card Management Corp., which is a wholly-owned subsidiary of American Express Co. and the issuer of AmEx gift cards, along with the New Jersey Retail Merchant Association and the New Jersey Food Council, filed a motion in December 2010 to stop the Garden State from enforcing the data collection requirement. A Dec. 31, 2010, report on the legal consultancy website Lexology.com said the reporting requirements would be "burdensome" on stored-value card issuers.
But Judge Frida L. Wolfson denied the motion, stating in an opinion filed Jan. 14, 2011, that "there is no legal basis for this court to enjoin the enforcement of the data collection provision. To the contrary, collection of the purchaser's last known address has been sanctioned by the United States Supreme Court and is integral to the Texas priority scheme."
Wolfson was referring to the "Texas vs. New Jersey priority scheme," a case heard before the Supreme Court in 1965, where the court ruled that first priority to unclaimed funds belongs to the state of the creditor or the owner's last known address, according to the Los Angeles-based law firm Ryan LLC, which specializes in unclaimed property issues.
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.
