DC Sues AT&T For Unclaimed Phone Minutes 145
Suki I submits news that Washington, D.C.'s attorney general has filed suit (District of Columbia vs. AT&T Corp, Superior Court of the District of Columbia), claiming the city has the right, through laws applying to unclaimed property, to unused calling-card balances held in the name of D.C. residents. "The suit claims that AT&T should turn over unused balances on the calling cards of consumers whose last known address was in Washington, D.C. and have not used the calling card for three years. 'AT&T's prepaid calling cards must be treated as unclaimed property under district law,' the attorney general's office said in a statement. ... [That sum] represents some 5 to 20 percent of the total balances purchased by consumers who use the calling cards. States and municipalities have often similarly used unclaimed property laws, known as escheat laws, to claim ownership of unused retail gift card balances."
Suki I links also to Reason Magazine's coverage.
Yes!!! (Score:1, Insightful)
Re:Have to side with AT&T on this one. (Score:3, Insightful)
Yes they will claim her "Nookie"... The Government's being screwing people for years.
GrpA
Re:Yes!!! (Score:5, Insightful)
As consumers, we might hate it, but you have to think of it this way... a gift card is an outstanding debt. A business doesn't want to have thousands or tens of thousands of tiny outstanding debts floating around FOREVER. That is the main reason there are "fees" to reduce the value of the card to zero when it isn't used.
It is the same idea as having checks expire after 180 days. If someone doesn't cash the check, it can't just sit out there "forever". The business needs to write off that debt so they can clean up their books. Otherwise, someone could come back 10 years later and cash it. Think of your own checks- would you like it if someone you wrote a check to sat on it for 5 years, then cashed it at a time when you least had the ability to pay for it?
I don't think it is unreasonable to have some type of expiration date or balance reduction time limit on gift cards, as long as it isn't too soon.
Re:AT&T Not Voiding the Cards? (Score:2, Insightful)
Re:Yes!!! (Score:5, Insightful)
That's reasonable. There's one problem though - if the issuer can profit from unused balances the issuer has an incentive to encourage people not to redeem their gift cards.
Requiring unused balances be transferred to the public coffers removes that incentive and retains the benefits of gift cards that expire.
Big internet access bonus for the DC area (Score:5, Insightful)
So anything that's unclaimed like this defaults back to the city? I wonder what they're going to do with the remainder of everyone's unclaimed, unlimited internet access each month. Did they pool the unused hours off of old AOL CDs? What about all-you-can-eat buffets? Solved DC's hunger problems right there.
Re:Get to the point, please (Score:3, Insightful)
I know all of us are pondering the same thing:
Does this apply to unused gamecards for WoW? Does government have the right to thousands of hours of unused WoW gametime?
Yes, if you were to purchase the gamecards and never cash them in Blizzard would not be allowed to just void them. The government would have the right to take them and hold them for you and if you did not collect them after a certain while the government could do whatever with them.
Re:Yes!!! (Score:1, Insightful)
The outstanding gift card balances are basically loans at 0%, companies don't mind having outstanding balances at all. In fact they want it.
Companies probably invest portions of the balances in Government Bonds and such and see a return on the essentially free loan. You hold reserves for current redemptions, and use short term investment tools so the money is still liquid. Any interest is Free Money. Use a 3rd party processor for admin and give them a slice of the free money, and now you don't even have to administer the operation (someone would have to manage the free money machine, but that's what Finance is for). Free Money!
Of course the company could use the unpaid balances as pure capital if the obligation to the customer went away. Sounds like stealing to me.
Re:Big internet access bonus for the DC area (Score:5, Insightful)
Re:Yes!!! (Score:3, Insightful)
Corp v. Govt? Bottom Line: You Lose (Score:2, Insightful)
There is another reason for governments to escheat funds that I haven't seen posted. It is a fact that governments make a tidy sum of money off of these transactions, as many escheated funds are never claimed. For some governments, it is a material source of revenues.
For that reason, governments are not aggressive in alerting taxpayers that they are holding their funds. Some US states have an on line mechanism for submitting a claim, and most government put a legal notice in a paper once a year, but the actual process to secure such funds tends to be complex (due to security concerns) and lengthy (because we're dealing with the government, after all).
I personally see it as a fight between two entities (the corporate world v. the government), neither of which is thrilled about giving you your money back...
Re:AT&T Not Voiding the Cards? (Score:3, Insightful)
Re:Yes!!! (Score:3, Insightful)
As for the other half of your question, I would think any sensible person would consider the money 'spent' as soon as the check was written, and not spend it on something else.
The problem with that theory is that it only takes one such check to make your account statements not match your own records from that point on, which would become a bookkeeping nightmare.
Re:Dear Washington DC (Score:3, Insightful)
Re:This is just plain stupid (Score:3, Insightful)
Your country spends way too much time litigating stupid shit instead of actually solving problems.
Hey, you have to go with whatever talents you have. We happen to be very good at litigating stupid shit, thank you. Actually solving problems, not so much....besides being a lot harder, it might actually reduce the amount of stupid shit available to litigate. Then where would we be? Who's going to pay to retrain all those out of work Stupid Shit Litigators? We might get desperate and have to import other countries' stupid shit to litigate. What would that do to our balance of trade?
Clearly, you just do not understand how America works...
Comment removed (Score:3, Insightful)
Re:Yes!!! (Score:2, Insightful)
i still don't see your point. what you're saying is that it would be better if you knew exactly when the check would be cached, because then you'd be able to actually invest your money until then, but that isn't an argument against a long period of time between check writing and cashing. it's the same as saying it would be better to have money than not have money, it's a trivial observation but doesn't contribute anything since there is no genie that gives you money just because you wished for it.
the fact is that you don't pass up the chance to invest all the money you owe to someone if check cashing delay were possible, since if it isn't there would not be any money to invest at all. interest in a checking account triumphs no interest at all, it's competitiveness with interest in a savings, money market or cd account does not matter since it is not an option. and the only work you do for maintaining liquidity is keeping the cash in your account, which is no work at all.
Re:Poke-non: gotta disclaim 'em all (Score:5, Insightful)
I think the general principle behind that would be
"This valuable item is not in use, it is not on private property, its rightful owner has for all intents and purposes forgotten that it existed anymore and will very likely not use it ever again. But all citizens have an interest in not letting value vanish, so it is appropriate that the disclaimed value is transferred to the State to use it. That way, all can benefit from lower taxes and higher revenues. No one is hurt, because the value was disclaimed long ago and would have otherwise benefitted someone who's not the rightful owner or no one at all when the value finally vanished."
AT&T or any other gift card issuer have the money and never had to deliver any goods. They are not the rightful owner of the money unless they found a way to hold up their part of the deal. Letting them keep the money for unredeemed gift cards would be an unjust benefit for them, even introducing an incentive to prefer "store money" instead of Fed Money. Because it is impractical to have all stores track down the gift card buyers, the State can reappropriate the funds and put them to use before the store goes bankrupt or moves out of state and the monies are finally lost.
I'm surprisingly okay with that, because I think it reduces the incentive of businesses to use anything other than the green Fed Money known the world over or to devise schemes that leave over untold uselessly fractioned monies. The State as a catch-all for fall-out from the daily business routines is not impractical. Use it, claim it or the State puts it to good use for you before it is lost.
The State better not even think about applying that principle to real estate or bank accounts held in real currency. These are property forms especially chosen to store value as they are unperishable. Reappropriating them is only acceptable when their owner died and absolutely no living heirs can be found for twenty years. But anything else than that will warrant an early Guy Fawkes day.
This suit needs to fail (Score:3, Insightful)
I personally hate gift cards and calling cards, but I think this suit needs to fail for several reasons:
1) The consumers that bought the cards paid for minutes. They did not deposit money on their cards, and minutes are not legal tender currency.
2) Many gift cards don't carry expiration dates. If the governments do this, it will force card issuers to put an expiration date on the cards.
3) Success in this litigation will embolden other governments that are looking for ways to close budget shortfalls without doing the fiscally responsible thing and cutting wasteful spending. Unfortunately, the first place where most governments choose to cut spending, instead of looking for waste, is in the school districts, police and fire precincts. Threatening cuts in those services makes it easier to justify doing stupid things like this, or raising taxes.