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DC Sues AT&T For Unclaimed Phone Minutes

timothy posted more than 4 years ago | from the sheila-dixon's-mistake-was-subtlety dept.

The Courts 145

Suki I submits news that Washington, D.C.'s attorney general has filed suit (District of Columbia vs. AT&T Corp, Superior Court of the District of Columbia), claiming the city has the right, through laws applying to unclaimed property, to unused calling-card balances held in the name of D.C. residents. "The suit claims that AT&T should turn over unused balances on the calling cards of consumers whose last known address was in Washington, D.C. and have not used the calling card for three years. 'AT&T's prepaid calling cards must be treated as unclaimed property under district law,' the attorney general's office said in a statement. ... [That sum] represents some 5 to 20 percent of the total balances purchased by consumers who use the calling cards. States and municipalities have often similarly used unclaimed property laws, known as escheat laws, to claim ownership of unused retail gift card balances." Suki I links also to Reason Magazine's coverage.

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145 comments

All your value belong to us? Nope. (5, Interesting)

LostCluster (625375) | more than 4 years ago | (#30631148)

This is law in many places... leave a balance in a bank account and fail to respond to any correspondence or make any transactions, and that money is transferred to the government who will publish your name in a massive newspaper insert, and then give it back to you if you claim it by proving the social security number the account was under is yours, and if that times out it goes to the government to do whatever they want with it.

Gift cards in many places have taken up the retailers on "if this fee is not allowed by law" to kill off inactivity fees. You now have many years or until the store shuts its doors for good (even during a post-bankruptcy liquidation that operates under the store's name) to use that money.

So, why does AT&T and the other phone companies think they can get away with voiding cards they don't hear from for three years and keeping the money? It's an unclaimed balance, and businesses aren't allowed to profit from such things in many other cases... what's the difference?

AT&T Not Voiding the Cards? (4, Interesting)

BBCWatcher (900486) | more than 4 years ago | (#30631212)

I don't think AT&T is voiding the cards. Washington, D.C., seems to be asserting that the card numbers should expire after three years. But why 3 years? Why not 5? Or 7? Or 10? Or 50? I assume AT&T will argue that 3 is arbitrary and, of course, too little time. I also assume that AT&T will argue that a certain federal agency in Washington, the FCC, regulates all things telephone, so (dear District), kindly go take it up with them. And, if those two arguments don't work, naturally AT&T would provide the District with about 386,200 calling cards, each with an average of 6 minutes of call time remaining, so that the city government can hold onto the actual unclaimed property until citizens reclaim their cards. After all, those citizens purchased minutes, and that's the unclaimed property in question. There's no cash there any more.

Re:AT&T Not Voiding the Cards? (2, Interesting)

mewshi_nya (1394329) | more than 4 years ago | (#30631282)

Don't most phone cards say the minutes actually DON'T have a cash value?

Re:AT&T Not Voiding the Cards? (4, Informative)

asdf7890 (1518587) | more than 4 years ago | (#30631368)

Don't most phone cards say the minutes actually DON'T have a cash value?

Can't most governments ignore such small print unless it is somehow enshrined in law (so the lawyer fight induced by trying to ignore said small print would be more costly than the potential gain). Many software EULAs state things that are quite patently not legally enforceable in most jurisdictions - I'm guessing the small print on phone cards and similar have no more basis in law than an EULA.

Re:AT&T Not Voiding the Cards? (1)

mewshi_nya (1394329) | more than 4 years ago | (#30631392)

Yeah, you have a point. Very nicely done.

Re:AT&T Not Voiding the Cards? (2, Informative)

DJRumpy (1345787) | more than 4 years ago | (#30632026)

They have intrinsic cash value for the balance on the card. It would have no value outside of the company who issued it as it wouldn't be legal tender at, say, the local sandwich shop. "No Cash Value" is typically something you see on things like poker chips, and game tokens and such. Return them to the company who issued them and they will honor it's value. That phrase simply means you won't get any value for it outside of the issuing company.

Non-refundable (1)

tepples (727027) | more than 4 years ago | (#30632076)

Return them to the company who issued them and they will honor it's value.

Unless "no cash value" is next to "non-refundable".

Re:Non-refundable (1)

DJRumpy (1345787) | more than 4 years ago | (#30632134)

They aren't asking for a 'refund'. They are asking that the remaining balance be transferred to another holder.

This type of thing is done all the time by states using unclaimed property laws.

Poke-non: gotta disclaim 'em all (1)

tepples (727027) | more than 4 years ago | (#30632202)

They are asking that the remaining balance be transferred to another holder.

No cash value, non-refundable, and non-transferable without the original card. Look at any stored value cards that may linger in your wallet; for everything you suggest, a lawyer has thought of a "non" to get around it.

Re:Poke-non: gotta disclaim 'em all (1)

DJRumpy (1345787) | more than 4 years ago | (#30632276)

Your suggesting a company can simply ignore a law because they print something on a card? They could print anything they wanted and it still wouldn't dissolve the states right to unclaimed property.

Re:Poke-non: gotta disclaim 'em all (2, Insightful)

hairyfeet (841228) | more than 4 years ago | (#30632916)

What I don't get is why a usually libertarian sanctuary like /. doesn't seem to have a problem with the states grabbing unclaimed property? Hell both sides are already taxing and spending like there is no tomorrow, why should they have the right to grab someone's stuff because they haven't used it in x amount of time? What business is it of theirs?

We already have them practically turning us upside down and shaking in hopes of loose change falling out, lets not give them more ways to snatch, okay?

Re:Poke-non: gotta disclaim 'em all (5, Insightful)

phoenix321 (734987) | more than 4 years ago | (#30633340)

I think the general principle behind that would be

"This valuable item is not in use, it is not on private property, its rightful owner has for all intents and purposes forgotten that it existed anymore and will very likely not use it ever again. But all citizens have an interest in not letting value vanish, so it is appropriate that the disclaimed value is transferred to the State to use it. That way, all can benefit from lower taxes and higher revenues. No one is hurt, because the value was disclaimed long ago and would have otherwise benefitted someone who's not the rightful owner or no one at all when the value finally vanished."

AT&T or any other gift card issuer have the money and never had to deliver any goods. They are not the rightful owner of the money unless they found a way to hold up their part of the deal. Letting them keep the money for unredeemed gift cards would be an unjust benefit for them, even introducing an incentive to prefer "store money" instead of Fed Money. Because it is impractical to have all stores track down the gift card buyers, the State can reappropriate the funds and put them to use before the store goes bankrupt or moves out of state and the monies are finally lost.

I'm surprisingly okay with that, because I think it reduces the incentive of businesses to use anything other than the green Fed Money known the world over or to devise schemes that leave over untold uselessly fractioned monies. The State as a catch-all for fall-out from the daily business routines is not impractical. Use it, claim it or the State puts it to good use for you before it is lost.

The State better not even think about applying that principle to real estate or bank accounts held in real currency. These are property forms especially chosen to store value as they are unperishable. Reappropriating them is only acceptable when their owner died and absolutely no living heirs can be found for twenty years. But anything else than that will warrant an early Guy Fawkes day.

Re:Poke-non: gotta disclaim 'em all (1)

Thinboy00 (1190815) | more than 4 years ago | (#30633444)

What I don't get is why a usually libertarian sanctuary like /. doesn't seem to have a problem with the states grabbing unclaimed property? Hell both sides are already taxing and spending like there is no tomorrow, why should they have the right to grab someone's stuff because they haven't used it in x amount of time? What business is it of theirs?

We already have them practically turning us upside down and shaking in hopes of loose change falling out, lets not give them more ways to snatch, okay?

This is /. AT&T is a giant evil monopoly. So, just like Microsoft, /.ers don't care about reality, they just want to bash the monopoly in question.

Re:AT&T Not Voiding the Cards? (1)

phantomcircuit (938963) | more than 4 years ago | (#30633700)

Actually they do clearly state their cash value. The card regardless of the number of minutes associated with it is worth $0.01 USD.

Re:AT&T Not Voiding the Cards? (1, Informative)

Anonymous Coward | more than 4 years ago | (#30631294)

After all, those citizens purchased minutes, and that's the unclaimed property in question. There's no cash there any more.

In the article, DC wants AT&T to convert the minutes to cash value and give them the money.

Re:AT&T Not Voiding the Cards? (2, Insightful)

vakuona (788200) | more than 4 years ago | (#30632100)

Why can't AT&T insist that people use said minutes rather than get cash. It's not like AT&T has refused to let people call. This is not a reasonable suit.

Re:AT&T Not Voiding the Cards? (1, Insightful)

BCW2 (168187) | more than 4 years ago | (#30631336)

The spendocrats in DC see potential untapped money to waste?

Get to the point, please (0)

Anonymous Coward | more than 4 years ago | (#30631430)

I know all of us are pondering the same thing:

Does this apply to unused gamecards for WoW? Does government have the right to thousands of hours of unused WoW gametime?

Re:Get to the point, please (2, Insightful)

lyml (1200795) | more than 4 years ago | (#30631628)

I know all of us are pondering the same thing:

Does this apply to unused gamecards for WoW? Does government have the right to thousands of hours of unused WoW gametime?

Yes, if you were to purchase the gamecards and never cash them in Blizzard would not be allowed to just void them. The government would have the right to take them and hold them for you and if you did not collect them after a certain while the government could do whatever with them.

Vitual Items Could Be Claimed (1)

FathomIT (464334) | more than 4 years ago | (#30632042)

Wow. When you think about it the same could apply to virtual items in different online game worlds. For example there are many video games that have items to buy and sell for real money. So same rules would apply for unused accounts and the $ items that exist within them. The state could sell the items online if not claimed.

Cash out (1)

p51d007 (656414) | more than 4 years ago | (#30631632)

Anytime I get one of those stupid "rebate cards" after a phone purchase, I keep it til the first of the month, and pay part or all of a bill with it. I know there are probably a lot of people who leave a few dollars on the card that the companies who issue the cards hope never gets spent. Free money for the companies that issue them.

Re:All your value belong to us? Nope. (0)

Anonymous Coward | more than 4 years ago | (#30631804)

that money is transferred to the government who will publish your name in a massive newspaper insert

As far back as 1998, most states had their escheat lists online so, even if they were required to publish the list in the paper, you didn't have to spend time looking there.

Re:All your value belong to us? Nope. (5, Interesting)

cgenman (325138) | more than 4 years ago | (#30632106)

I had one state (Virginia, I believe), track me down after 6 years for a balance left in a former employer's pay system. I was surprised at the tenacity of the government in a case like this. They didn't just grab the money an run, like some other commenters here seem to imply.

Re:All your value belong to us? Nope. (4, Funny)

misexistentialist (1537887) | more than 4 years ago | (#30632726)

Abandoned property would end up in the general fund used to serve taxpayers. Well-salaried and -benefited bureaucrats, however, have a personal stake in the process of tracking down and returning money to the owners. Especially when it takes 6 years.

I think there's a big flaw in the law .... (1)

King_TJ (85913) | more than 4 years ago | (#30633326)

When I, as a consumer, purchase a pre-paid card with X number of usable minutes on it, I typically plan on using the whole thing, OR I'm not that concerned, because the ability to make some phone calls, as needed, is what I'm really paying for to begin with. If the fine print on the card informs me, before the purchase, that there's an expiration date on the card - then fine. I can opt to accept that, or decline the purchase if I think that's unacceptable.

I don't really have a problem with the phone company selling the cards keeping expired, unused balances as a profit. It makes no sense to me that govt. should expend resources of its own to "manage" these unused balances. How much does it really cost the taxpayers annually to keep that system going? (They've got to keep paying to place those unclaimed property ads in the newspapers, I assume .... and keep a staff employed to keep track of everything.)

Inactivity fees are a different issue, though ... because most of the time, they were designed to catch the unaware by surprise. People who assumed a $100 gift card would still be worth $100 when they got around to visiting the store 6 months after issuance shouldn't be suddenly told "You only have $40 left because we deducted $10 for each month you didn't use it!" You don't see manufacturer coupons or rebates deducting portions of the total discount depending on how quickly you use them. But you DO almost always see expiration dates clearly stated on them, and we all understand that concept.

Have to side with AT&T on this one. (0, Troll)

Anonymous Coward | more than 4 years ago | (#30631166)

Much as I hate to do it. I don't see how this works. If a woman is hoping to get laid and goes to a bar and doesn't, does that mean a law-maker has the right to claim her unused nookie in the name of the people of D.C.? The lost-and-found laws should not apply to something like this. What next? When you volunteer to help and no one needs your help, they can draft you and force you to work because your charity was unclaimed? I am confident the DC guys will loose this one. If they win, it'll be just one more article of proof that this country has lost its mind. Also, other uses of such laws as apply to gift-card balances need to be struck down. This is getting ridiculous.

Re:Have to side with AT&T on this one. (2, Insightful)

GrpA (691294) | more than 4 years ago | (#30631206)

Yes they will claim her "Nookie"... The Government's being screwing people for years.

GrpA

Yes!!! (1, Insightful)

pubwvj (1045960) | more than 4 years ago | (#30631168)

Finally. I HATE the way retailers are predating on consumers. I do not give gift cards because of this. Companies are stealing by devaluing cards. They have our money, interest free. The gift cards should stay valid forever. I hope the government nails them on this hard. Retroactively too.

Re:Yes!!! (4, Informative)

Attila Dimedici (1036002) | more than 4 years ago | (#30631190)

Finally. I HATE the way retailers are predating on consumers. I do not give gift cards because of this. Companies are stealing by devaluing cards. They have our money, interest free. The gift cards should stay valid forever. I hope the government nails them on this hard. Retroactively too.

The problem is you have it backward. This sort of law did not come into being because of retailers devaluing gift cards, retailers started devaluing gift cards because of these laws. Back before gift cards, when there were only gift certificates, states started passing laws that if a gift certificate was not redeemed after a certain time, the retailer was required to turn that money over to the state.

Re:Yes!!! (2, Interesting)

yourpusher (161612) | more than 4 years ago | (#30631364)

Back before gift cards, when there were only gift certificates, states started passing laws that if a gift certificate was not redeemed after a certain time, the retailer was required to turn that money over to the state.

Citation needed.

Re:Yes!!! (3, Funny)

Anonymous Coward | more than 4 years ago | (#30632362)

STFU statist. This is slashdot, and all problems are PROVEN to be caused by governments, not private corporations. No "citations" are needed. Who is John Galt?

Re:Yes!!! (4, Interesting)

Attila Dimedici (1036002) | more than 4 years ago | (#30632656)

Sorry, I don't have a citation. However, I worked as a manager of a retail store before there were gift cards. When we sold gift certificates we had to keep careful record of when they were sold and when they were redeemed, if they were not redeemed within a certain time period (my recollection is two years, but I'm not sure) we had to report it to the home office so that they could remit the money to the state. This policy was new (not because the law was new, but because the company I worked for had just found out about it), and they introduced expiration dates for gift certificates at the same time (the expiration date coincided with the date at which they were required to turn the money over to the state). Stores that were in states that did not have such laws did not have expiration dates on their gift certificates.

Re:Yes!!! (0)

Anonymous Coward | more than 4 years ago | (#30633002)

Back before gift cards, when there were only gift certificates, states started passing laws that if a gift certificate was not redeemed after a certain time, the retailer was required to turn that money over to the state.

Citation needed.

Or, instead of "disguising" your laziness by telling someone else to do the research, you could do it yourself...

Re:Yes!!! (4, Insightful)

markdavis (642305) | more than 4 years ago | (#30631238)

As consumers, we might hate it, but you have to think of it this way... a gift card is an outstanding debt. A business doesn't want to have thousands or tens of thousands of tiny outstanding debts floating around FOREVER. That is the main reason there are "fees" to reduce the value of the card to zero when it isn't used.

It is the same idea as having checks expire after 180 days. If someone doesn't cash the check, it can't just sit out there "forever". The business needs to write off that debt so they can clean up their books. Otherwise, someone could come back 10 years later and cash it. Think of your own checks- would you like it if someone you wrote a check to sat on it for 5 years, then cashed it at a time when you least had the ability to pay for it?

I don't think it is unreasonable to have some type of expiration date or balance reduction time limit on gift cards, as long as it isn't too soon.

Re:Yes!!! (3, Interesting)

Alrescha (50745) | more than 4 years ago | (#30631276)

"Think of your own checks- would you like it if someone you wrote a check to sat on it for 5 years, then cashed it at a time when you least had the ability to pay for it?"

Since my money is generally invested somewhere, yes. I'd love it if I got to collect interest for 5 years on every check I ever wrote. As for the other half of your question, I would think any sensible person would consider the money 'spent' as soon as the check was written, and not spend it on something else.

A.

Re:Yes!!! (2, Insightful)

iluvcapra (782887) | more than 4 years ago | (#30631844)

If you're payees could hold a check and deposit it at any arbitrary time t, after five years it's possible your checking account would have to have a balance in tens (if not hundreds) of thousands of dollars. You're passing up hundreds of dollars a month in interest or dividends on other uses of that money, in order to absorb the risk of other people cashing the check whenever.

Re:Yes!!! (2, Interesting)

kraada (300650) | more than 4 years ago | (#30632436)

This is a bogus claim, because the alternative is simply not having the money. There are plenty of checking accounts with nonzero interest.

An example to make things clearer:

Imagine that you write 12 checks per year (one a month), each of which is in the sum of $1000. In case A they get cashed immediately in case B they get cashed one year later.

Case A: You make zero interest, each month $1000 is deducted from your checking account.
Case B: For the month you make $1000 * 1/12 of a year's interest. The second month $2000 * 1/12 of a year's interest. And so on until the 12th month where you make $12000 * 1/12 of a year's interest. Then things begin declining as the money begins getting taken out. (so month 13 is $11000 * 1/12, and so on). After 24 months, your $12000 has been deducted. However, assuming an interest rate of .6% (for ease of math), we would have made $720 in interest.

Re:Yes!!! (1)

iluvcapra (782887) | more than 4 years ago | (#30632644)

Interest in a demand checking account is completely uncompetitive with interest in a savings, money market or CD account. In any case, your payee is making you do a lot of work maintaining liquidity just so he can have the convenience of depositing a check whenever he wishes. The point is that the money you've written to your payee is in suspense: it is yours, and you could allocate it if you knew when it was going to be demanded, but you don't.

The whole idea of a check is that it is as good as the makers word for cash, and in the real world, the quality of someone's promise to pay money is only good in a certain time and place. A check is not a contract, and even if it were, a perpetually-active promise to pay would be unconscionable and illegal (under common law) [wikipedia.org] .

Re:Yes!!! (2, Insightful)

zarzu (1581721) | more than 4 years ago | (#30633094)

i still don't see your point. what you're saying is that it would be better if you knew exactly when the check would be cached, because then you'd be able to actually invest your money until then, but that isn't an argument against a long period of time between check writing and cashing. it's the same as saying it would be better to have money than not have money, it's a trivial observation but doesn't contribute anything since there is no genie that gives you money just because you wished for it.

the fact is that you don't pass up the chance to invest all the money you owe to someone if check cashing delay were possible, since if it isn't there would not be any money to invest at all. interest in a checking account triumphs no interest at all, it's competitiveness with interest in a savings, money market or cd account does not matter since it is not an option. and the only work you do for maintaining liquidity is keeping the cash in your account, which is no work at all.

Re:Yes!!! (1)

zarzu (1581721) | more than 4 years ago | (#30632472)

you're not making any sense. those tens/hundred of thousands of dollars would not even be there in the first place if you wouldn't allow delayed check cashing, meaning the alternative of "interests or dividends on other uses of that money" doesn't exist since that money would now be owned by the payees.

let me start at the beginning once more: if your payees cash the check instantly you will loose the money as soon as you write the check and you're not able to do anything with it from that moment on. now the longer your payees do not cash the check after you wrote it, the longer the money sits in your account and gets you interest. it is trivial that you will not be able to move said money because it is reserved for the payee, but it is still generating interest on the bank, which it would not be doing if it were cashed instantly.

Re:Yes!!! (2, Insightful)

Dragonslicer (991472) | more than 4 years ago | (#30632294)

As for the other half of your question, I would think any sensible person would consider the money 'spent' as soon as the check was written, and not spend it on something else.

The problem with that theory is that it only takes one such check to make your account statements not match your own records from that point on, which would become a bookkeeping nightmare.

Re:Yes!!! (0)

Anonymous Coward | more than 4 years ago | (#30632594)

why? I've got a few checks (that I know won't be cashed) that are now several years old. Quicken takes care of the bookkeeping trivially; before quicken they're treated just like any other check you wrote after the statement closed out for the month. Again, trivial bookkepping. The problem comes in when you close out the account--then you have potentially bounced checks on your hand.

Re:Yes!!! (1)

parodyca (890419) | more than 4 years ago | (#30631284)

I don't think it is unreasonable to have some type of expiration date or balance reduction time limit on gift cards, as long as it isn't too soon.

They already do. It's called inflation.

Re:Yes!!! (0)

Anonymous Coward | more than 4 years ago | (#30631460)

As consumers, we might hate it, but you have to think of it this way... a gift card is an outstanding debt. A business doesn't want to have thousands or tens of thousands of tiny outstanding debts floating around FOREVER. That is the main reason there are "fees" to reduce the value of the card to zero when it isn't used.

It is the same idea as having checks expire after 180 days. If someone doesn't cash the check, it can't just sit out there "forever". The business needs to write off that debt so they can clean up their books. Otherwise, someone could come back 10 years later and cash it. Think of your own checks- would you like it if someone you wrote a check to sat on it for 5 years, then cashed it at a time when you least had the ability to pay for it?

I don't think it is unreasonable to have some type of expiration date or balance reduction time limit on gift cards, as long as it isn't too soon.

Are you serious, outstanding dept. When you go and buy a gift card its paid, they got their money, period! Deducting a monthly debit on the card or claiming the remaining balance is taking from the consumer.
This is another reason why I do not buy gift cards.

Re:Yes!!! (1)

nstlgc (945418) | more than 4 years ago | (#30632416)

Obviously he's talking about a dept the company has to the buyer of the gift certificate, not the other way around.

Re:Yes!!! (4, Funny)

ftobin (48814) | more than 4 years ago | (#30631570)

As consumers, we might hate it, but you have to think of it this way... a gift card is an outstanding debt. A business doesn't want to have thousands or tens of thousands of tiny outstanding debts floating around FOREVER. That is the main reason there are "fees" to reduce the value of the card to zero when it isn't used.

I agree. I can't imagine that there would be an organization (let's call it a "knab") that if you deposited money with them, got something in return, they could manage these outstanding liabilities that you could redeem for the product at any time in the future, near or distant. In the meantime, this fictitious knabs would be free to invest your deposit safely until you withdrew it. Knabs would have a terrible time trying to keep track of all these accounts on their books, and couldn't possibly make money, so much so that I can't imagine a world with a knab.

Also, what's so hard about keeping track of all these inactive accounts? It's not like they have many businesses have a hand-written ledger that they have to re-copy all account values around. Since all the accounts are likely similar, automated processing should be able to handle the number, whether it's processing 100 or 10,000.

Re:Yes!!! (5, Insightful)

ceoyoyo (59147) | more than 4 years ago | (#30631594)

That's reasonable. There's one problem though - if the issuer can profit from unused balances the issuer has an incentive to encourage people not to redeem their gift cards.

Requiring unused balances be transferred to the public coffers removes that incentive and retains the benefits of gift cards that expire.

Re:Yes!!! (0)

Anonymous Coward | more than 4 years ago | (#30631606)

Actually checks don't expire. I worked at a bank for many years-many people think they expire but no. If you still hae the account the check was written on or the account was just recently closed then the check is honored.

While were at it, there is no such thing as a post-dated check. Someone might agree to wait till a certain date to cash a check but there is nothing obligating them to do so.

Re:Yes!!! (2, Informative)

larry bagina (561269) | more than 4 years ago | (#30632756)

Quick! Tell that to the Uniform Commercial Code!

3-113. DATE OF INSTRUMENT.

(a) An instrument may be antedated or postdated. The date stated determines the time of payment if the instrument is payable at a fixed period after date. Except as provided in Section 4-401(c), an instrument payable on demand is not payable before the date of the instrument.

Re:Yes!!! (1)

markdavis (642305) | more than 4 years ago | (#30633778)

Sorry, that is just not true as a blanket statement. If a check has an expiration date printed on it, then it does, indeed, expire. However, if it is not printed on the check, then you are right- it is pretty open ended and nebulous at that point.

Re:Yes!!! (1, Insightful)

Anonymous Coward | more than 4 years ago | (#30631736)

The outstanding gift card balances are basically loans at 0%, companies don't mind having outstanding balances at all. In fact they want it.

Companies probably invest portions of the balances in Government Bonds and such and see a return on the essentially free loan. You hold reserves for current redemptions, and use short term investment tools so the money is still liquid. Any interest is Free Money. Use a 3rd party processor for admin and give them a slice of the free money, and now you don't even have to administer the operation (someone would have to manage the free money machine, but that's what Finance is for). Free Money!

Of course the company could use the unpaid balances as pure capital if the obligation to the customer went away. Sounds like stealing to me.

Re:Yes!!! (1)

winwar (114053) | more than 4 years ago | (#30633552)

"A business doesn't want to have thousands or tens of thousands of tiny outstanding debts floating around FOREVER."

They aren't debts. They are pieces of plastic or paper redeemable for stuff. Already paid for by yesterdays money that MIGHT someday be redeemed by another customer. A bankers dream. No wonder VISA and MASTERCARD have gift cards.

"That is the main reason there are "fees" to reduce the value of the card to zero when it isn't used."

Nope. It's so they get to earn interest AND keep the principal. Think of it as legalized stealing.

"Think of your own checks- would you like it if someone you wrote a check to sat on it for 5 years, then cashed it at a time when you least had the ability to pay for it?"

Nope. But perfectly legal. And it will happen if you don't stop payment on the check.

"I don't think it is unreasonable to have some type of expiration date or balance reduction time limit on gift cards, as long as it isn't too soon."

Most people disagree. I would agree on one condition. If it was in really big bold print on the card rather than buried in the fine print. But it never was.

If it had been clear, gift cards would never have been popular with those conditions. So it wasn't clear and as a result, many states prohibited the charges. What a surprise.

Re:Yes!!! (0)

Anonymous Coward | more than 4 years ago | (#30631614)

Finally. I HATE the way retailers are predating on consumers. I do not give gift cards because of this. Companies are stealing by devaluing cards. They have our money, interest free. The gift cards should stay valid forever. I hope the government nails them on this hard. Retroactively too.

Yeah, those retailers are FORCING people to buy their gift cards!

FORCING them, I say!

Re:Yes!!! (0)

Anonymous Coward | more than 4 years ago | (#30632342)

There's a more practical reason to avoid giving gift cards - they are wildly less practical than cash:

  • I've run into vendors that don't accept them at all.
  • If I return a purchase made on a gift card, vendors cannot give me a refund.
  • Managing the leftover balance is really annoying. I recently spent $28 of a $30 gift card. I now have so little left that it's under the limit of what most vendors will permit on a card transaction. Wasted money.

In all cases I can think of, cash is a superior gift if you want to give someone money. Give up the illusion that a gift card is somehow classier or shows that you put more thought into it.

Lawyers (2, Interesting)

ebonum (830686) | more than 4 years ago | (#30631210)

Wow. I gotta hand it to them. It is times like this when when we should all take note of how lawyers really are a breed apart. I understand the theory, and it does makes sense. Mind you, understanding and agreeing are not one in the same. But how twisted do you have to be to come up with stuff like this? I never would have thought of that!

As the said in the LotR about the lawyers foreclosing on the shire ( I think it was LotR, The Revenge ).
"There's something strange at work here. Some evil drives these creatures, sets its will against us."

Next target (1)

ebonum (830686) | more than 4 years ago | (#30631298)

Next week the AG will be suing "massage" parlors for unused "buy ten get a freebie" cards!

Re:Next target (1)

drinkypoo (153816) | more than 4 years ago | (#30631308)

Next week the AG will be suing "massage" parlors for unused "buy ten get a freebie" cards!

Rest assured, the AG gets freebies already. That's what it means to be in a position of power.

Level playing field (2, Interesting)

tp_xyzzy (1575867) | more than 4 years ago | (#30631334)

This action sounds like they're trying to prevent at&t to get unfair advantage over selling stuffs they have no intention to provide service for. They probably bundled minutes with some product and most of their customers payed for the service, but never intended to use it. So at&t got unfair compensation for selling bogus service.

If practises like this are not removed, the market will be full of gift cards and calling cards, with most of the people's money going to something they're not going to use. It sounds pretty good principle that when money changes hands, there is equivalent service or valuable stuff going the other way. Bogus services where this is not true should be removed from the marketplace. Guess unused calling cards have this kind of thing that money moves but service does not. At&t's competitors who do not have similar practices will be in disadvantage for not scamming their customers.

So sounds like very reasonable action by the government. At least if they already have laws they can use for it! (they didn't invent the law just for this at&t's case :-)

Screw AT&T (1)

Bob_Who (926234) | more than 4 years ago | (#30631352)

They've been screwing us for years. What ever happened to the anti trust laws that smashed them into baby bells? I'm tired of over paying for electrons. Telecom is a major rip off, mostly we pay for advertising. We should make them pay.

Re:Screw AT&T (1)

that this is not und (1026860) | more than 4 years ago | (#30632986)

Who is this 'we' you refer to? Do you have a mouse in your pocket?

Re:Screw AT&T (1)

dbcad7 (771464) | more than 4 years ago | (#30633736)

The company you think of as AT&T is really a re-branded SBC and has only been AT&T for 5 years.. They are not also the only ones who have done the merge and get bigger thing.. In souther California I was a GTE customer, they became Verizon.. then when I moved to Northern Cal I was a PacBell customer who became SBC.. then when I moved to Reno I was an SBC customer who became AT&T... To tell you the truth, I think it hurts these companies to merge their different offerings under the same name.. For example, you might have a horrible experience with their mobile phones, but a better experience with their landline or DSL service.. To the consumer it's all the same company, so therefore if one sucks, they all do.. But in the company they are all run separately.

They should never expire (1, Offtopic)

drinkypoo (153816) | more than 4 years ago | (#30631370)

I don't mean gift cards. I'll rant about them in a minute. But phone cards; we're talking about truly minimal data here, it's one row in a database. AT&T could issue phone cards for years before the amount of data they'd have to store would become an undue financial burden to their evil empire, death star asses.

Gift cards are lame: Why not just give the gift of cash if you care so little about someone that all you can do is send them to a store you think they would like? Gift cards: the gift that says "I have no fucking imagination." I dread holidays because of the expectations surrounding gift giving, but even I can do better than that. Phone cards, though

Re:They should never expire (1)

mewshi_nya (1394329) | more than 4 years ago | (#30631406)

I prefer gift cards to certain places, because then no one can bitch about how I spent them. Get a gift card for, say, an electronics store? "Well, I HAD to use it, all they sell is electronics, so I bought a new $toy!"

Re:They should never expire (1)

mrsurb (1484303) | more than 4 years ago | (#30631538)

Gift cards are worse than lame - they convert cash that is thoroughly liquid into cash that is only available to spend at particular stores - and those stores are always the big chains. So the big chains get money up front for goods that will eventually be bought, goods that can often be found cheaper elsewhere (especially online).

Furthermore, when you spend the gift card, the value of the purchase will never equal the value on the card. So you either get goods under the value of the card and waste the rest (which eventually goes to the store), or you end up forking over your own cash to make up the difference.

Re:They should never expire (1)

vk2 (753291) | more than 4 years ago | (#30631850)

Not if you plan and time it correctly. During the recent Christmas holiday I planned to buy a decent LCD TV - found a good one at good price at BB; went to Kroger got a bunch of gift cards ~ equal to the value of the TV and got 10% return on the purchase I made at kroger (See http://supermarketnews.com/news/kroger_gift_1123/ [supermarketnews.com] ) And 3% cash back from my credit card.

Re:They should never expire (1)

c0d3g33k (102699) | more than 4 years ago | (#30632410)

Lame? Not always - gift cards are quite useful in many circumstances, so don't write them off so glibly. Before gift cards (yes, there was such a time) giving people "throughly liquid cash" as a gift meant they were just as likely to use it to pay the rent, buy groceries or stick it in their wallet with the other liquid cash and spend it for ordinary things, not the intended gift. In the face of this, gift cards were a nice way to help the recipient "treat themselves" as intended rather than just spend the money on mundane necessities. The point of a gift, after all, is to give the recipient something special they might not have allowed themselves to purchase on their own (that's what we try to do in my family, anyhow).

Why not just buy the gift instead? Gift cards (or cash) are a copout for the lazy so they don't have to bother figuring out a "proper" gift, right? No, not always. There are plenty of people who have hobbies or interests that are specialized and complex, so trying guess what they really want can lead to the wrong gift. Yeah, one could ask enough questions to determine the correct gift, but that's just as likely to spoil the surprise - might as well just ask "tell me exactly what you want and I'll buy that". Rather than buy the wrong TV or game or computer or whatever, you can buy a gift card for the place where the desired gift is sold, and you can be reasonably sure that the recipient gets exactly what they want, and you don't blow the surprise either.

As far as the value of the purchase not matching the value of the card, that's not as simple as you cynically describe it either. Consider the situation where someone wants an expensive item that doesn't quite fit their budget. They won't buy what they really want because they can't afford it. Maybe you can't either (not entirely, anyway). Giving a gift card is a great way to help partially pay for the item when buying the item outright isn't feasible.

 

Re:They should never expire (1)

drinkypoo (153816) | more than 4 years ago | (#30633556)

giving people "throughly liquid cash" as a gift meant they were just as likely to use it to pay the rent, buy groceries or stick it in their wallet with the other liquid cash and spend it for ordinary things

You should trust them to be mature enough to manage their happiness and their need to be housed, especially in the current economic state.

Re:They should never expire (1)

tepples (727027) | more than 4 years ago | (#30632172)

Why not just give the gift of cash

You can't mail cash.

Re:They should never expire (1)

russotto (537200) | more than 4 years ago | (#30632304)

You can't mail cash.

Sure you can. It's not really the best idea in the world as there's no recourse if it's lost or stolen, but there's no law against it.

Re:They should never expire (1)

OhPlz (168413) | more than 4 years ago | (#30632872)

I used to work in the phone card business. We had all sorts of calling card programs. There were promotional cards (buy three packs of diapers, get twenty minutes talk time), we had cards for telco providers to rebrand (like AT&T), we had the convenience store quickie cards that were use and toss, and so on.

Most of them were use and toss. The whole program was meant to have a certain life span, then we shut it down and finalized all the accounting on it.

We knew not all the minutes of all the cards would be used. We would estimate how much wouldn't be, and factor that into the cost of the program. If by some fluke, it was all used up, we would have lost money. Instead, we'd usually be close and it would keep the cost of the minutes down as well as give us (the service provider) and the company selling the cards a useful profit.

If the states decide to take the unused time, there are huge problems. For one, which state? Many calling card users bought cards because they were traveling. Is it the state where the card was sold? Where it was most used? Where the database is? What if the account is replicated to many distributed databases?

If the government were to succeed with this, it would be a billing nightmare for providers, and it would raise the costs for consumers. The industry is practically dead as it is since most people use cell phones now for roaming. This proposal would likely kill what's left of it, making it too expensive and too burdensome for providers to run.

What's next, if I don't finish my coffee at Dunkin's, the state is going to claim a monetary value on what's left over? If I put ten quarters in a self-serve car wash, is the government going to demand a record of how much time I actually used?

Re:They should never expire (1)

winwar (114053) | more than 4 years ago | (#30633596)

"We knew not all the minutes of all the cards would be used. We would estimate how much wouldn't be, and factor that into the cost of the program. If by some fluke, it was all used up, we would have lost money. Instead, we'd usually be close and it would keep the cost of the minutes down as well as give us (the service provider) and the company selling the cards a useful profit."

Or they could run a simple and useful promotion designed not to screw the customer over. One that would benefit everyone. I know that is a novel idea these days. Just saying.

Re:They should never expire (1)

OhPlz (168413) | more than 4 years ago | (#30633628)

It would cost more. What part of that don't you understand? You think you're "getting screwed" less by paying a lot more for the card?

These programs can't run forever. The toll free numbers cost money, having customer support set up for it cost money, the carrier circuits cost money, the switch and servers cost money, the techs to run them cost money. That's why the programs have a definitive end date. That's why the cards are sold with a set expiration date.

No one is "getting screwed". The cards are sold with the expiration date posted right on them. Don't want a card that expires in a year? Don't buy one. There are a bazillion of them to choose from. Find one with a longer expiration and be prepared to pay for it. Nothing in this life is free.

It's a march towards communism when people despise a company because it makes a profit. That's the whole point of capitalism people. That's what puts money behind your paycheck.

Re:They should never expire (0)

Anonymous Coward | more than 4 years ago | (#30633574)

Actually, I think phone cards are probably a lot more than one row in a database, and the records probably persist a lot longer than the card. It may be almost as much data as having a regular old monthly-paid phone account. (All the same timestamp and duration and possibly destination phone number info, except it's being "billed" to the card's account instead of a person). Likewise they probably keep a lot of data on the gift card usage too. The use patterns are both kinds of cards are probably used, at the very least, as some of the input to their pricing decisions.

Big internet access bonus for the DC area (4, Insightful)

jparker (105202) | more than 4 years ago | (#30631626)

So anything that's unclaimed like this defaults back to the city? I wonder what they're going to do with the remainder of everyone's unclaimed, unlimited internet access each month. Did they pool the unused hours off of old AOL CDs? What about all-you-can-eat buffets? Solved DC's hunger problems right there.

Re:Big internet access bonus for the DC area (1)

tp_xyzzy (1575867) | more than 4 years ago | (#30631734)

I can immediately see other good uses of this:
  1) unused hard disk space
  2) unused usb sticks
Unfortunately there is no way to know how much unused hard disk space we have. But it's very big number...

Re:Big internet access bonus for the DC area (2)

that this is not und (1026860) | more than 4 years ago | (#30633016)

Unused processor cycles.

Citizen! Your screen saver is anti-social. It is being removed. Please install the new Obama screen saver. Enjoy!

Re:Big internet access bonus for the DC area (4, Insightful)

tomhath (637240) | more than 4 years ago | (#30631770)

They already keep unused time on parking meters. I'd like some way of reclaiming that.

Re:Big internet access bonus for the DC area (2, Funny)

BlueParrot (965239) | more than 4 years ago | (#30631918)

So anything that's unclaimed like this defaults back to the city? I wonder what they're going to do with the remainder of everyone's unclaimed, unlimited internet access each month. Did they pool the unused hours off of old AOL CDs? What about all-you-can-eat buffets? Solved DC's hunger problems right there.

Dear Sir/Madam

We find your ideas intriguing and would like to subscribe to your newsletter.

Best regards:
The lawyers

Re:Big internet access bonus for the DC area (1)

noidentity (188756) | more than 4 years ago | (#30632300)

Damn, Comcast etc. are going to hate this! Imagine all that unused bandwidth each month, under the 250GB or whatever cap. The city will be able to give free internet access to all residents with this unclaimed bandwidth.

Re:Big internet access bonus for the DC area (0)

Anonymous Coward | more than 4 years ago | (#30633750)

when I went to DC you had to pay per pound of food in a buffet.

The government is evil (1, Funny)

Anonymous Coward | more than 4 years ago | (#30631956)

The government is an evil entity, created by satan's liberals to hurt and destroy all the good little libertarian children who don't share their toys. It is said that in the far far future, there will one day be a savior who will come down and destroy the evil government and in its place establish a perfect society that will favor commerce over taxation and liberty over tyranny. In this we believe. Lord Rand hear our prayer.

Corp v. Govt? Bottom Line: You Lose (2, Insightful)

tonymus (671219) | more than 4 years ago | (#30632050)

There is another reason for governments to escheat funds that I haven't seen posted. It is a fact that governments make a tidy sum of money off of these transactions, as many escheated funds are never claimed. For some governments, it is a material source of revenues.

For that reason, governments are not aggressive in alerting taxpayers that they are holding their funds. Some US states have an on line mechanism for submitting a claim, and most government put a legal notice in a paper once a year, but the actual process to secure such funds tends to be complex (due to security concerns) and lengthy (because we're dealing with the government, after all).

I personally see it as a fight between two entities (the corporate world v. the government), neither of which is thrilled about giving you your money back...

If DC can claim this, why can't the consumer? (0)

Anonymous Coward | more than 4 years ago | (#30632212)

The Pandoras box here is huge. Many a business model is based upon unclaimed intangibles.

This is just plain stupid (1)

holophrastic (221104) | more than 4 years ago | (#30632296)

Can't believe that your country spends resources on such stupid things. Maybe they should think about worthwhile things, and put stuff like this lower on the list -- say below airport security.

In any event, here's why this is stupid.

First, they may be unused, but they aren't unclaimed. You purchased a service from AT&T, not property. AT&T still owns them.

Second, the whole unclaimed property when it comes to money in stale bank accounts is because money is also owned by your country. It has to be, otherwise you could burn it and actually make your country poorer. The mint can't just print more money.

Third, this is demented because AT&T would simply have calling cards expire the day before they'd default to the government. So this is all for nothing.

Your country spens way too much time litigating stupid shit instead of actually solving problems. Having put into effect a dozen airline security measures as a result of last week, you'd think that one of those measures would be a good counter to last week's attack. None of them are. Congrats on doing nothing. Maybe this DC general should spend effort doing something useful.

Re:This is just plain stupid (1)

CrimsonAvenger (580665) | more than 4 years ago | (#30632470)

It has to be, otherwise you could burn it and actually make your country poorer. The mint can't just print more money.

No law against burning money. I've never bothered, mind you, but I will if someone tries to make it illegal.

And yes, the mint CAN just print more money. It's called "inflation".

Re:This is just plain stupid (1)

holophrastic (221104) | more than 4 years ago | (#30632638)

"inflation" kind of kill the word "just". When the mint prints more money, your country's currency becomes less valuable.

That's why you can't burn money -- or destroy it. It's not yours.

Re:This is just plain stupid (1)

CrimsonAvenger (580665) | more than 4 years ago | (#30632790)

That's why you can't burn money -- or destroy it. It's not yours.

There. I just lit a dollar bill on fire. Seems you were wrong about me being able to burn money....

Re:This is just plain stupid (1)

holophrastic (221104) | more than 4 years ago | (#30632922)

I didn't say you weren't capable. I said it's illegal. Learn the difference between law and enforcement.

Re:This is just plain stupid (2, Insightful)

Stanislav_J (947290) | more than 4 years ago | (#30632892)

Your country spends way too much time litigating stupid shit instead of actually solving problems.

Hey, you have to go with whatever talents you have. We happen to be very good at litigating stupid shit, thank you. Actually solving problems, not so much....besides being a lot harder, it might actually reduce the amount of stupid shit available to litigate. Then where would we be? Who's going to pay to retrain all those out of work Stupid Shit Litigators? We might get desperate and have to import other countries' stupid shit to litigate. What would that do to our balance of trade?

Clearly, you just do not understand how America works...

Re:This is just plain stupid (1)

holophrastic (221104) | more than 4 years ago | (#30632930)

Well spoken.

well... (0)

WeeBit (961530) | more than 4 years ago | (#30632402)

This probably has a lot to do with the economy right now. Many cities are hurting, so they will tap anything to get that extra dollar so they can keep their city afloat. Cities are always hurt the most when the economy is sour. Case in point less taxes coming in on properties. DC has a lot more too loose. Government presence is everywhere two fold. Low officials, high officials, foreign, and domestic. They can't cut back city crews to save money. In the past they relied more on Federal Government to pick up where they could not. But even the Federal presence can only do so much. So they have to get creative getting that money flowing in. I bet many other cities are watching how this case turns out.

I think this is different than gift cards (1)

Antony-Kyre (807195) | more than 4 years ago | (#30632476)

It will depend on the state when it comes to gift cards. But, unusued phone minutes?

Won't it devalue the profit the phone company is making off of them? Think about it. The phone company sells these minutes knowing a certain percentage will probably expire. And I assume it's not 100% profit for the phone company when they sell these minutes. So, won't they adjust the price knowing 100% of all the minutes sold will end up used?

Re:I think this is different than gift cards (1)

bstender (1279452) | more than 4 years ago | (#30633594)

One should assume that any well run business ratchets all prices up to the maximum that the market will bear, routinely.

(Maybe there will be a proposed regulation tabled in some committee somewhere instead.)

Dear Washington DC (3, Informative)

Dunbal (464142) | more than 4 years ago | (#30632588)

I admit that I am a "deadbeat". I have some rather large, unclaimed and unpaid debts that are over 3 years old. Please let me know when you wish to take those over from me. Thanks...

Oh wait, how come it's different suddenly?

Re:Dear Washington DC (2, Insightful)

Greyfox (87712) | more than 4 years ago | (#30632842)

If Washington DC took them over, I bet they'd be a lot more effective about getting you to cough up the cash.

Re:Dear Washington DC (0)

Anonymous Coward | more than 4 years ago | (#30633294)

Is your name Fannie Mae or Freddie Mac?

My Rights (1)

flyneye (84093) | more than 4 years ago | (#30633298)

I have the right to any tax dollars unused by the years end.
I have the right to any unused dinners and reservations wasted by D.C. politicos.
I have the right to any call girls paid who were unused because of erectile dysfunction of Senate,Congress and Cabinet.
I have the right to do the unused trophy wives as well.
I have the right to any liquor they have unused by years end.
Don't forget I get all your unused minutes too.
So clear the way, myself and a legion of well armed lawyers will be overtaking D.C. next month because
'I also claim any unused votes and I'm gonna be runnin' the whole f**kin' show. They haven't been running it for several administrations.
So warm up and sing "Hail to the Chief" , President Fly N. Eye is comin' to town.
Get ol Kennedy and Hillary bent over and greased up , cuz I'm gonna use them too.
I can pimp the whole bunch just to lower and eventually eliminate taxes.
I claim the right. Get over it.

This suit needs to fail (2, Insightful)

rdean400 (322321) | more than 4 years ago | (#30633632)

I personally hate gift cards and calling cards, but I think this suit needs to fail for several reasons:

1) The consumers that bought the cards paid for minutes. They did not deposit money on their cards, and minutes are not legal tender currency.

2) Many gift cards don't carry expiration dates. If the governments do this, it will force card issuers to put an expiration date on the cards.

3) Success in this litigation will embolden other governments that are looking for ways to close budget shortfalls without doing the fiscally responsible thing and cutting wasteful spending. Unfortunately, the first place where most governments choose to cut spending, instead of looking for waste, is in the school districts, police and fire precincts. Threatening cuts in those services makes it easier to justify doing stupid things like this, or raising taxes.

How about rebates? (1)

John Jorsett (171560) | more than 4 years ago | (#30633748)

I've wondered how long it was going to be before states start applying escheat or unclaimed property laws to unclaimed mail-in rebates that seem to infest the retail electronics business. For governments facing massive deficits, there's a lot of money sitting there, smiling provocatively.

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