Canadian Class Action Suit Alleges Open-Loop Gift Cards Violated the Law

All Canadian consumers are a class that has been wronged,according to the law firm of Munroe & Company, Barristers & Solicitors,because a Visa Gift Card charges fees and expires, the firm said in announcinga lawsuit that seeks to have the class recognized.

Munroe & Company, Barristers& Solicitors, in cooperation with Branch MacMaster LLP, has filed aproposed national class action in the Supreme Court of British Columbia onbehalf of a consumer who purchased “The Perfect Gift” Visa gift card. The card purports to expire and chargeactivation and monthly fees, all of which is contrary to BC consumer protectionlaws. The lawsuit claims, among otherthings, the return of all expired balances and all fees charged to Canadianconsumers since November 1, 2008.

The lawsuit names a number of financial institutions asdefendants. The suit may lead to some issuers abandoning the gift card marketif it sets a precedent that becomes too onerous for issuers to live with. Thesuit will bear watching by the industry to see how the issue is both argued andresolved, and whether or not there could be spill over to the closed-loop giftcard market.

Overview by Ben Jackson, Director of the Prepaid Advisory Service for Mercator Advisory Group

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