Leawood, Kan. – February 9, 2024: Last month, the West Virginia House and the Senate introduced similar legislation, House Bill 5250 (“HB 5250”) and Senate Bill 403 (“SB 403”) that would add a new article to West Virginia’s Consumer Credit and Protection Act requiring signage at points-of-sale warning of potential scams involving gift cards and requiring training of employees to identify and combat gift card fraud. It further provides for a civil penalty for violations of the provisions.
SB 403 has been referred to the Senate Judiciary Committee. HB 5250 was amended this week in the House Judiciary Committee, the substitute to HB 5250 was approved by the Judiciary Committee and placed on the Special Calendar of the House as a whole. The amendments found in HB 5250 would become effective July 1, 2024. SB 403 does not provide for an effective date. While the subject matter of the two bills is similar in nature, in order to become law, the bills will either need to be reconciled or one bill will need to be pasted by both legislative houses of West Virigina.
The proposed Bills would require, among other things, that the sellers of gift certificates must conspicuously display a notice prescribed by a Consumer Protection and Anti-Trust Division of the Attorney General’s Office at or near where the gift card is displayed or near the location where the sale occurs that warns the purchase about card scams and provides instructions on what to do if they suspect they are the victim of a scam. 2024 WV HB 5250 §46A-9-2. See also 2024 WV SB403 §61-17-3(a). Specifically, HB 5250 states: “No seller shall sell a gift card to a purchaser unless the seller displays a form of notice described in (a). Id. at 2(b). The form notice shall: “(1) Caution the purchaser about prepaid card scams; and (2) Instruct the purchaser on what to do if they suspect they might be a potential victim of such a scam.” Id. at (c).
This notice shall be posted in a conspicuous manner in the location where the sale occurs or on an electronic payment screen before finalizing payment. 2024 WV HB 5250 §46A-9-3(c) and 2024 WV SB403 §61-17-3(b). Display via electronic payment screen is not required. Id.
An example of an appropriate notice provided by the Bills is the following: “Protect yourself from prepaid card scams; including requests related to lotteries, taxes, employment status or utility payments. Do not provide any prepaid card information to someone you do not know, including pin number or card number. If you feel that you are a victim of fraud, contact local law enforcement.” 2024 WV HB 5250 §46A-9-3(c)(3) and 2024 WV SB403 §61-17-3(c).
Both Bills define “gift card” similarly. HB 5250 defines “gift card” to mean “a written promise or electronic payment device that: (1) [i]s usable at a single merchant or affiliated group of merchants that share the same name, mark; (2) [i]s issued in a specific amount; (3) [m]ay or may not be increased in value or reloaded; (4) [i]s purchased and loaded, or solely purchased or loaded, on a prepaid basis for the future purchase or delivery of any goods or services; and (5) [i]s honored upon presentation.” 2024 WV HB 5250 §46A-9-1(a). SB 403 broadens the definition to include a card that is also “usable at multiple, unaffiliated merchants or service providers.” 2024 WV SB403 §61-17-2.
The Bill further requires the retailer to train its employees on how to identify and respond to gift card fraud. Specifically, it requires that the retailer “shall conduct the training in accordance with guidelines concerning the detection and prevention of gift card fraud provided by the Director of the Consumer Protection and Anti-Trust Division, in consultation with the Attorney General.” 2024 WV HB 5250 §46A-9-4. See also 2024 WV SB 403 §61-17-4. The Bill then provides a non-exhaustive list of what the guidelines shall include and “best practices” for retailers to apply to prevent gift card fraud. See 2024 WV HB 5250 §46A-9-3 (b) and (c) and 2024 WV SB403 §61-17-4.
Regarding penalties, the proposed amending legislation specifies, “[a]ny seller that violates the provision of this chapter shall be subject to a civil penalty of up to $250.” 2024 WV HB 5250 §46A-9-5. SB403 broadens this penalty to include in addition to the civil fine, the violator will also be guilty of a misdemeanor. 2024 WV SB403 §61-17-5.
Card Compliant will continue to monitor West Virginia for the proposed legislation and provide updates as we receive them.
To read West Virginia House Bill 5250 click here: West Virginia House Bill 5250.
To read West Virginia Senate Bill 403 click here: West Virginia Senate Bill 403.
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