NJ Unclaimed Property Changes -- The Saga Continues
New Jersey's attempts to apply the state unclaimed property laws to stored value cards (gift cards) and similar instruments has not gone smoothly. The process (and governing requirements) seem to change on a weekly basis, and continue to evolve.
The Treasury Department recently released another announcement providing guidance on implementation of the stored value card law. First, the Treausry has decided to exempt "prepaid phone cards" from the requirements of the unclaimed property act. As we mentioned earlier, a bill was already pending before the legislature to institute such an exemption. Most notably, the Treasurer has decided to eliminate the requirement that stored value card issuers collect name and address information from the purchaser. Instead, the Treasury has determined that obtaining the zip code of the purchaser is sufficient. The announcement also provides that, effective November 1, 2010, the following guidelines will be in place:
- Prepaid phone cards redeemable in minutes will be exempt from the Act, but cards issued by telephone companies redeemable in cash or for prepaid services will not be exempt;
- Holders that obtain name and address information for stored value card purchasers in the normal course of business will be required to continue to obtain that information;
- Holders that require a stored value card recipient to "register" the card will be required to obtain name and address information during the registration process, and will be required to retain that information;
- For holders who do not obtain such information, they will be required to obtain the zip code of the purchaser;
Separately, a new bill has been introduced in the New Jersey State Assembly that would effectively undo all of the recent changes to the state Unclaimed Property Act. Assembly Bill 3250 would remove all references in the Act to "stored value cards," increase the dormancy period for traveler's checks back to 15 years, and increase the money order dormancy period back to 7 years. The bill is currently pending before the Assembly Appropriations Committee. Of course, unless and until the bill passes, the current unclaimed property laws will remain in effect.