Ó An Roinn Fiontar, Trádála agus Fostaíochta
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The Minister for Business, Enterprise and Innovation, Heather Humphreys TD, announced today that the Consumer Protection (Gift Vouchers) Act 2019 will come into operation on Monday 2 December.
Minister Humphreys said:
"I am very pleased to be able to bring the five-year expiry date and a number of other important protections for consumers into effect from Monday. I am particularly pleased to do so at the start of the Christmas period when many of us will buy or receive gift vouchers.
"Consumers should not find themselves unable to use gift vouchers given to them by family members or friends because of unreasonably short expiry periods imposed by gift voucher issuers. Many gift vouchers until now have had expiry periods of just one or two years and in some cases it has been as little as six months. As of Monday anyone who receives a gift voucher will have the certainty that it will be valid for at least five years."
The Bill also includes provisions that ban a number of unfair terms in gift voucher contracts which were brought to the Minister’s attention in the course of her Department’s public consultation on gift vouchers.
The first of these provisions outlaws any term in a gift voucher contract that requires the full value of a voucher to be spent in one transaction. Where a gift voucher cannot be used more than once and the consumer does not redeem the full amount of the voucher in an initial purchase, the business will now be required to reimburse any remaining balance of more than one euro by way of cash, electronic transfer or another voucher.
A second provision bans contract terms that prevent consumers from using more than one gift voucher in a transaction. It was also brought to the Minister’s attention during the public consultation that certain airlines cancelled gift vouchers where the name on the voucher was not identical to the person’s name on their passport. Some airlines also charged recipients to change the name on the voucher. The Minister has therefore introduced a third provision which bans any term in a gift voucher contract that requires the name of the recipient to be provided by the purchaser and that allows the gift voucher provider to cancel the voucher where that name differs from the name on the recipient’s passport or other form of personal identification or to charge a fee for changing the recipient’s name.
Minister Humphreys commented:
"Short expiry periods are not the only way in which consumers have been treated unfairly by certain gift voucher providers.
"Some businesses have required consumers to spend a voucher in full in a single transaction. This meant if you have a restaurant voucher for €100 and your meal came to €80, you were prevented from getting change or a voucher with the balance of €20.
"Others have prevented consumers from using more than one gift voucher in a transaction. So for example if a person wanted to use two €50 vouchers together to buy a product for €100, they were prevented from doing so.
"Cases have also been brought to my attention where consumers have had vouchers cancelled by airlines where their name as given on their passport differed even slightly from their name as given by the friend or relative who bought the gift voucher for them. This meant if a person bought a voucher for their friend Liz but the name on the passport was actually Elizabeth, then the airline could actually cancel the voucher entirely or charge the recipient to correct the name.
"The businesses that used these kind of contract terms to deprive consumers of the full benefit of gift vouchers should not have been doing so, and from Monday they will no longer be able to make unfair gains at the expense of Irish consumers.
"It is estimated that every year consumers in Ireland lose millions in unredeemed or expired vouchers. These measures, which come into effect from Monday, will protect consumers and will help to ensure the value of the voucher you buy for your loved one this Christmas ends up in their pocket and not somebody else’s."
ENDS
Prior to the enactment of the Consumer Protection (Gift Vouchers) Act 2019, there has been no specific statutory regulation of the expiry date or other terms of gift voucher contracts. Gift vouchers supplied to consumers are subject to the provisions of general consumer protection legislation, in particular the provisions of the Consumer Protection Act 2007 on unfair, misleading and aggressive commercial practices and of the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995. Gift vouchers such as the One4All card which are redeemable across a non-limited network of service providers come within the definition of “electronic money” in the European Communities (Electronic Money) Regulations 2011 and are subject to the provisions of those Regulations and of the European Union (Payment Services) Regulations 2018.
The draft Bill approved by Government in June 2018 also included a provision giving the Minister for Business, Enterprise and Innovation power to set fees for the issue and replacement of gift vouchers and for ‘inactive balances’ on gift vouchers. The latter fees which are also known as dormancy or management fees typically apply after 12 months and can range from €1.40 to €3.50 per month. These and other fees for gift vouchers apply primarily to electronic money gift vouchers. Following the Government decision, the Department of Business, Enterprise and Innovation undertook a public consultation on gift voucher fees and expiry dates in July-August 2018.
The Consumer Protection (Gift Vouchers) Bill published in December 2018 did not include the provision included in the original proposal for the Bill empowering the Minister for Business, Enterprise and Innovation to regulate fees for the issue and replacement of gift vouchers and for inactive balances on gift vouchers. In the course of drafting the Bill, the Office of the Attorney General expressed concern in legal advice that the proposed provision on the regulation of fees was at risk of incompatibility with the maximum harmonisation nature of the Electronic Money Directive and of conflict with the separate regulatory regime for electronic money. In the light of this legal advice, the provision on the regulation of fees was omitted from the Bill pending the outcome of consultations with the Department of Finance which has policy responsibility for electronic money and the Central Bank which has regulatory responsibility for electronic money. In the subsequent consultations, both bodies indicated that they shared the concerns expressed by the Office of the Attorney General.
In view of the legal advice from the Office of the Attorney General and its endorsement by the Department of Finance and the Central Bank, Minister Humphreys reluctantly concluded that it would not be possible to provide for the regulation of gift voucher fees in the Bill. As the Minister made clear during the passage of the Bill, she remains strongly of the view that dormancy fees in particular can have an adverse impact on consumers and should be subject to regulation. In May 2019, she wrote to Vice-President Valdis Dombrovskis, the then European Commission with responsibility for the Electronic Money Directive, informing him of her concerns about these fees and of the need to review the Directive to provide that it should either directly regulate these fees or permit Member States to do so in national legislation. In reply, Vice-President Dombrovskis stated that he fully appreciated the legitimate concerns expressed by the Minister and that these concerns would be taken into account in any future review of the Directive.
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