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.
All your value belong to us? Nope. (Score:5, Interesting)
This is law in many places... leave a balance in a bank account and fail to respond to any correspondence or make any transactions, and that money is transferred to the government who will publish your name in a massive newspaper insert, and then give it back to you if you claim it by proving the social security number the account was under is yours, and if that times out it goes to the government to do whatever they want with it.
Gift cards in many places have taken up the retailers on "if this fee is not allowed by law" to kill off inactivity fees. You now have many years or until the store shuts its doors for good (even during a post-bankruptcy liquidation that operates under the store's name) to use that money.
So, why does AT&T and the other phone companies think they can get away with voiding cards they don't hear from for three years and keeping the money? It's an unclaimed balance, and businesses aren't allowed to profit from such things in many other cases... what's the difference?
Lawyers (Score:3, Interesting)
Wow. I gotta hand it to them. It is times like this when when we should all take note of how lawyers really are a breed apart. I understand the theory, and it does makes sense. Mind you, understanding and agreeing are not one in the same. But how twisted do you have to be to come up with stuff like this? I never would have thought of that!
As the said in the LotR about the lawyers foreclosing on the shire ( I think it was LotR, The Revenge ).
"There's something strange at work here. Some evil drives these creatures, sets its will against us."
AT&T Not Voiding the Cards? (Score:5, Interesting)
Re:Yes!!! (Score:4, Interesting)
"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?"
Since my money is generally invested somewhere, yes. I'd love it if I got to collect interest for 5 years on every check I ever wrote. 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.
A.
Re:AT&T Not Voiding the Cards? (Score:3, Interesting)
Don't most phone cards say the minutes actually DON'T have a cash value?
Level playing field (Score:2, Interesting)
This action sounds like they're trying to prevent at&t to get unfair advantage over selling stuffs they have no intention to provide service for. They probably bundled minutes with some product and most of their customers payed for the service, but never intended to use it. So at&t got unfair compensation for selling bogus service.
If practises like this are not removed, the market will be full of gift cards and calling cards, with most of the people's money going to something they're not going to use. It sounds pretty good principle that when money changes hands, there is equivalent service or valuable stuff going the other way. Bogus services where this is not true should be removed from the marketplace. Guess unused calling cards have this kind of thing that money moves but service does not. At&t's competitors who do not have similar practices will be in disadvantage for not scamming their customers.
So sounds like very reasonable action by the government. At least if they already have laws they can use for it! (they didn't invent the law just for this at&t's case :-)
Re:Yes!!! (Score:3, Interesting)
Citation needed.
Re:All your value belong to us? Nope. (Score:5, Interesting)
I had one state (Virginia, I believe), track me down after 6 years for a balance left in a former employer's pay system. I was surprised at the tenacity of the government in a case like this. They didn't just grab the money an run, like some other commenters here seem to imply.
Re:Yes!!! (Score:3, Interesting)
This is a bogus claim, because the alternative is simply not having the money. There are plenty of checking accounts with nonzero interest.
An example to make things clearer:
Imagine that you write 12 checks per year (one a month), each of which is in the sum of $1000. In case A they get cashed immediately in case B they get cashed one year later.
Case A: You make zero interest, each month $1000 is deducted from your checking account. .6% (for ease of math), we would have made $720 in interest.
Case B: For the month you make $1000 * 1/12 of a year's interest. The second month $2000 * 1/12 of a year's interest. And so on until the 12th month where you make $12000 * 1/12 of a year's interest. Then things begin declining as the money begins getting taken out. (so month 13 is $11000 * 1/12, and so on). After 24 months, your $12000 has been deducted. However, assuming an interest rate of
Re:Yes!!! (Score:5, Interesting)
Re:Big internet access bonus for the DC area (Score:1, Interesting)
In my city, you can get a cash card for use in the city parking meters downtown. When you park, simply insert the card to have the meter withdraw the maximum amount (varies by meter, most allow up to an hour, some only 10 minutes). When you come back to the car, insert the card again and the meter puts unused cash back on the card. The cards can be reloaded online, and there's only a nominal upfront fee when you first get the card. IIRC, the costs of the system here are supposed to eventually break even because they have to empty the meters less often (they still take change as well), and compliance is higher since fewer people fret over leaving unused time in the meters. Talk to your city council or other governing body (unfortunately, I have no idea what the system is called or what company provides it).
- T
Re:Poke-non: gotta disclaim 'em all (Score:3, Interesting)
Let me stop you right there. You're already wrong in the second part of your basic premise. As far as the owner of a gift card or calling card is concerned, there's no account. They put money on a card, and thus as far as normal people are concerned, they perceive that the card has a certain dollar value. That card is in their possession on private property. Therefore these laws cannot legitimately be enforced against such monetary instruments. Allowing the government to confiscate money that backs these cards is no different than allowing them to confiscate the value behind an unused paper gift certificate, the stock behind a stock certificate, etc. It's completely absurd.
Further, to the owner's knowledge, there is no account number at a bank associated with it (despite the fact that we geeks know that it is basically implemented that way behind the scenes). This means that usually the owner cannot get cash out of these cards. Worse, the cards are generally anonymous, which means that there is no legal means for the owner to be notified about the government absconding with those funds or to reclaim them after the government takes them. In effect, this should be an illegal money grab.
On the flip side, those unclaimed property laws are the only recourse states have for preventing abusive practices like service fees on gift cards, expiration dates, etc. So in states where they are excluded from those laws, the public can still get screwed, just by the businesses instead of the government. What we need is an unambiguous federal statute that unifies the law on this matter, requiring that companies declare it as income only when the card is actually used (not exempting them from the unclaimed property law). It should also require that the card be maintained on the books indefinitely. It should require that these debts be repaid fully ahead of all other creditors in the event of bankruptcy. It should require that these funds be kept in a separate account and should prohibit any transactions to or from that account except for the transfer of funds related to the sale of or use of these cards. In short, we need real consumer protection laws instead of the hodgepodge of hacked together state laws we have now.