Class Calls Gift Cards a Black Hole for Fees

EDWARDSVILLE, Ill. (CN) - A class action accuses Visa, Services Credit Union and 1st MidAmerica Credit Union of failing to disclose administrative fees for gift cards. The lead plaintiff says she bought a $50 gift card for her father-in-law that due to undisclosed fees was worth only $2 by the time he tried to use it.

Named plaintiffs Karen Rhodes and Gene Rhodes claim the companies deduct administrative fees before the "valid through" date, making the cards worth less than face value. They sued in Madison County Circuit Court.

"Defendants placed the valid thru date conspicuously on the front of the GiftCard with the intent that plaintiff and all those similarly situated will rely on the valid thru date when, in fact, defendants knew that, due to defendants' application of Administration Fees, the GiftCard would not retain its stated value through the valid thru date," the complaint states.

Karen Rhodes claims she bought a gift card for her father-in-law that had a $50 value with a valid thru date of 12/8 printed on its face.

"On information and belief, and unknown to Ms. Rhodes, at the time of her purchase of the GiftCard, the actual cash value of the GiftCard was only $35.00, due to the Defendants' application of administrative fees of $2.50 per month prior to the date of purchase," the complaint states.

Karen Rhodes claims the card had a value of $2 due to the monthly administrative fees by the time her father-in-law used it.

The class consists of all holders of GiftCards issued by the defendants that lost any of the value of the original purchase prices before the expiration of the valid through date due to administrative fees. The class seeks disgorgement, an injunction, and damages for violations of the Illinois Consumer Fraud and Deceptive Practices Act. It is represented by Mark Goldenberg with Goldenberg Heller Antognoli.

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