By Alison Vekshin
Bloomberg News
Tuesday, August 15, 2006

National banks that issue gift cards will have to tell shoppers more about hidden fees, expiration dates and other terms under new rules announced yesterday by U.S. regulators after consumers complained that the charges were eroding the value of their presents.

The Office of the Comptroller of the Currency said banks must put the expiration date on the front of the card, disclose the amount of any monthly maintenance or inactivity fees, and provide a phone number or Web address. Consumers had complained the cards were deceptive for buyers and recipients. The agency said the fees sometimes can consume a card's entire balance.

The agency also advised banks to avoid practices that might mislead consumers, such as advertising a card as having no expiration date if monthly service or maintenance fees can reduce its value.

"As more national banks get into this market, we want to make sure they understand our expectations in this area," said OCC spokesman Robert M. Garsson. He said the rules will "help minimize the types of misunderstandings and problems that lead to consumer complaints," which had grown to 106 in 2005 from 34 in 2003.

The National Retail Federation, a merchant trade group based in the District, said last year that service fees and expiration dates are more common in cards issued by banks than those issued by retailers.

The trade group said the amount of gift cards sold during the 2005 holiday season rose to $18.5 billion from $17.3 billion a year earlier.