IMGCAP(1)]
The Consumers Union, the nonprofit publisher of Consumer Reports, sent a letter to the Federal Trade Commission today asking the agency to protect consumers who have gift cards from bankrupt companies. The letter asks the commission to require companies that sell closed-loop gift cards to set the money aside in a trust fund so consumers can get their funds back if the companies go out of business. It also asks the commission to require third-party distributors to stop selling gift cards for companies that file for bankruptcy. Consumers who have gift cards from companies that go bankrupt now have to try to recover their funds through court action like any other creditor, Michelle Jun, Consumers Union staff attorney, tells CardLine sister publication Prepaid Trends. The best way to protect consumers would be for the commission to require issuers to set aside gift card funds, Jun says. "We hope the FTC will act before this holiday season," she says. The commission does not comment on communications it receives, Frank Dorman, a spokesperson for the commission, tells CardLine.
