Have you ever lost track of a gift card, only to realize there was still money left on it? For customers of fashion giant H&M in New York, some of that forgotten gift card money should have been rightfully returned to the state as unclaimed funds. In a recent announcement, New York Attorney General Letitia James revealed that her office successfully recovered $36 million from H&M. This substantial sum represents unredeemed balances on gift cards that the retailer unlawfully withheld, failing to transfer them to New York State’s Office of Unclaimed Funds, as legally required. This victory ensures that New Yorkers can now potentially reclaim money owed to them from unused H&M gift cards.
H&M’s Unclaimed Gift Card Deception
Like many major retailers, H&M offers gift cards for purchase and use in their stores and online. When customers use these gift cards, the balance reduces as they buy clothing and other merchandise. However, a significant portion of gift cards are often left with unspent balances. New York State law mandates that after five years of inactivity, companies must turn over these unredeemed gift card balances to the state’s Abandoned Property Fund. This fund, overseen by New York State Comptroller Thomas P. DiNapoli’s Office, is designed to safeguard these assets until they can be claimed by their rightful owners.
The investigation revealed that H&M was fully aware of this legal obligation to transfer these unclaimed gift card balances. Despite this knowledge, for years, H&M deliberately chose not to comply. Instead of transferring the millions of dollars in unredeemed funds, they actively concealed their failure to adhere to the law. Adding to their misconduct, H&M reportedly provided false information to the state, claiming that a third-party company was managing their gift card operations, a claim that was proven untrue.
Investigation Uncovers H&M’s False Statements
The Attorney General’s Office initiated a thorough investigation into H&M’s practices following a whistleblower lawsuit filed under the New York False Claims Act. This act empowers individuals to bring legal action on behalf of the government and share in any recovered funds, incentivizing the exposure of fraudulent activities. The investigation confirmed that H&M had indeed entered into an agreement with an out-of-state entity, deceptively suggesting this company was handling their gift card business. However, in reality, H&M continued to manage their gift card operations internally, and crucially, the money from gift card sales remained within H&M’s own accounts.
Further investigation exposed that H&M had made multiple false statements to the state. They falsely asserted that their gift card balances had been transferred to the contracted company. In truth, H&M retained millions in unredeemed gift card balances and remained responsible for honoring these cards. They even went as far as submitting a fabricated letter to the state, falsely claiming that the third-party company had disbursed “tens of millions of dollars” on H&M gift cards, knowing that no such payments had been made. These deceptive actions were aimed at evading their legal responsibility to transfer the unclaimed funds to New York State.
The recent agreement between the Attorney General and H&M resolves these allegations of fraudulent concealment and false statements. As part of the settlement, H&M will pay over $28 million to New York State, with over $18 million specifically earmarked for the Abandoned Property Fund to cover unredeemed balances on gift cards sold before 2015. The whistleblower who brought this misconduct to light will receive $7.74 million as a reward for their crucial role in uncovering H&M’s unlawful practices.
Claim Your Unclaimed H&M Gift Card Money
This settlement offers a path for New York consumers to potentially recover their unclaimed money. If you possess an H&M gift card issued between 2004 and 2014, you have options. If you still have the physical gift card, you can attempt to use any remaining balance at H&M stores or online. More importantly, even if you no longer have the card, or the card is no longer usable, you can file a claim with the New York State Comptroller’s Office of Unclaimed Funds to recover your unredeemed balance.
To initiate a claim and check if you are owed money from an H&M gift card or other unclaimed funds, visit the official website of the Comptroller’s Office of Unclaimed Funds: https://www.osc.state.ny.us/unclaimed-funds. This website provides resources and instructions on how to search for and claim any money that may be rightfully yours.
This case serves as a strong reminder that companies operating in New York must adhere to the state’s laws, especially those designed to protect consumers. Attorney General James emphasized her office’s commitment to holding companies accountable, stating, “My office has zero tolerance for companies that disregard the law and line their pockets with money that belongs to hardworking people.” Thanks to this action, millions of dollars in unclaimed money will be returned to the state, ready to be claimed by New Yorkers. Don’t miss out – take the steps to check if you have unclaimed funds waiting for you.
