N.Y. (WETM) — A new law in New York State will require businesses that sell gift cards and gift certificates to post warnings about potential gift card fraud.
Starting on June 20, all businesses that sell gift cards and gift certificates will need to display warnings about gift card fraud. The warning notices will need to be posted near gift card displays or where sales occur. This will be near the registers for many stores.
This new law is in response to an increase in gift card scams. According to the FTC, consumers reported losing a total of $228.3 million to gift card scams. Scammers will ask people to make payments through gift cards and steal the funds without providing anything in return. Money lost to gift card scams is nearly impossible to trace and get back.
“With the number of gift card scams on the rise, it’s more important than ever to educate consumers so they know that gift cards should only be used for gifts, not to make payments,” said New York Secretary of State Robert J. Rodriguez. “This new law requiring warning signage where gift cards are displayed or sold will help to reduce the success rate of these scammers and protect consumers’ hard-earned money.”
Businesses can either use the warnings created by the Division of Consumer Protection (available here) or create their own. Warnings must caution the customer about pre-paid card scams and give instructions about what to do if the customer thinks they are being targeted by one of these scams.