OTS Issues Gift Card Guidance
The Office of Thrift Supervision (OTS) issued guidance this week on gift cards offered by OTS-regulated thrift institutions. The guidance assists institutions in ensuring adequate account administration, marketing, and sound consumer disclosure practices for gift card programs.The guidance encourages more uniform practices among thrifts that offer gift card programs, and supports institution efforts to improve consumers’ understanding of gift card features. The OTS also has an educational brochure for consumers http://www.ots.treas.gov/docs/4/480923.pdf.
Gift cards continue to grow in popularity and volume is expected to increase. About 20 percent of OTS-regulated institutions now offer some form of gift card. In the guidance, thrifts are advised they must have adequate policies and procedures in place to administer gift card programs, as well as a framework to address inherent program risks.
OTS Director John Reich stated that, “The growth of gift card programs is a natural extension of the retail focus of the thrift charter. While we encourage innovation in product offering by OTS-regulated thrifts, it’s important that we also ensure that institutions focus on the importance of disclosing and educating their customers regarding new and emerging retail products.†Thrifts must also ensure that they provide customers adequate information about the gift cards they offer, including disclosures on fees and expiration dates. Finally, the guidance reminds institutions on avoiding the use of misleading promotional materials. Read the complete guidance here http://www.ots.treas.gov/docs/4/480932.pdf".
