Skip to content

It looks like we may have content for your preferred language. Would you like to view this page in English?

Commercial Fax Rule Delayed Until 2006; New Gift Certificate Laws in Vermont and Nevada

FCC Extends Commercial Fax Exemption Until January 2006; Congress Approves Junk Fax Prevention Act

On June 27, the FCC voted to delay, until January 9, 2006, the effective date of the FCC’s 2003 decision to eliminate the established business relationship exemption from the requirement that marketers obtain written consent before sending a commercial fax.

This means that marketers can continue to send commercial faxes to those with whom they have an established business relationship without obtaining prior written consent (as long as they continue to comply with other telemarketing rules).

The new rule was scheduled to take effect July 1, 2005. The reason for the delay is that Congress was about to approve the Junk Fax Prevention Act, which would undo the FCC’s amended rule and create a statutory exemption from the requirement of obtaining written consent for those who have an established business relationship with the recipient.

Vermont and Nevada Enact Gift Certificate Laws

Vermont House Bill 198 took effect on July 1, 2005. The law requires gift certificates (which includes gift cards) to be valid for at least three years after issuance, and requires that the date of issuance and the expiration date be clearly printed on the gift certificate or, if an electronic card with banked dollar value, on a sales receipt, or made available on a web site or by calling a toll-free telephone number. If a gift certificate is not clearly marked with the expiration date, or if the expiration date is not made available as described above, the certificate will not be subject to the expiration date.

After the expiration date, the unused portion of the gift certificate must be returned to the holder, if requested.

All administrative and service fees, including dormancy fees, issuance fees, and redemption fees, are prohibited with the exception of a one-time issuance fee charged by a financial institution or licensed money transmitter.

The law provides for several exemptions including (1) a gift certificate issued as part of an awards or loyalty program where no money or other thing of value is given in exchange for the gift certificate, provided that the expiration date is clearly and legibly disclosed on the gift certificate; and (2) prepaid calling cards issued solely to provide an access number and authorization code for prepaid calling services.

Vermont’s new law provides for a private right of action.

Nevada Assembly Bill 19 applies to gift certificates issued on or after October 1, 2005. The law provides that it is a deceptive trade practice to issue a gift certificate unless certain conditions are met.

If a gift certificate contains an expiration date, one of the following must be clearly printed on the front or back of the gift certificate in at least 10 point font and in such a way that the information is readily available to the buyer before purchase:

(1) the expiration date, or (2) a toll-free telephone number and a statement that the buyer may call the number to obtain the balance and expiration date.

Service fees other than a fee to issue a gift certificate are prohibited unless specific disclosures are printed clearly on the front or back of the gift certificate in at least 10 point font and in such a manner that the information is readily available to the buyer before purchase. Service fees cannot exceed a total of $1 per month and cannot be imposed during the first 12 months after issuance.

The law provides for several exemptions including a gift certificate that is issued as part of an award, loyalty, promotional, rebate, incentive or reward program and for which the issuer does not receive money or any other thing of value.

The term gift certificate includes gift cards but does not include prepaid telephone cards or an instrument that can be used to obtain goods or services from more than one person or business entity, as long as the expiration date is plainly and conspicuously printed on the front or back of the instrument.

This client alert is a publication of Loeb & Loeb and is intended to provide information on recent legal developments. This client alert does not create or continue an attorney client relationship nor should it be construed as legal advice or an opinion on specific situations.

Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.