H&M reaches $36 mln settlement with New York over unused gift cards

NEW YORK, Could 19 (Reuters) – H&M can pay $36 million to settle accusations that the style retailer illegally stored hundreds of thousands of {dollars} in present playing cards that prospects by no means used, New York Legal professional Common Letitia James stated on Thursday.

The Swedish firm, whose full identify is H&M Hennes & Mauritz AB (HMb.ST), can pay $28.26 million to the state and $7.74 million to a whistleblower, William French.

James stated H&M had since 2008 unlawfully stored a minimum of $18.4 million in unused present card balances in its personal financial institution accounts, as a substitute of transferring them to the state’s Deserted Property Fund.

New York regulation requires present card issuers to show over unused card balances to the fund after 5 years of inactivity.

James additionally stated H&M repeatedly lied concerning the lacking transfers by saying an Ohio firm, which had no obligation to ship the balances to New York, dealt with its present card enterprise.

“My workplace has zero tolerance for corporations that disregard the regulation and line their pockets with cash that belongs to hardworking individuals,” James stated in an announcement. “Violating the regulation shouldn’t be stylish or tolerable.”

H&M, primarily based in Stockholm, makes a speciality of “quick vogue.” It didn’t admit or deny wrongdoing in agreeing to settle.

The corporate had no touch upon the settlement.

H&M has about 4,800 shops worldwide, and posted internet gross sales of 199 billion Swedish krona ($20.1 billion) in 2021, in response to its web site.

French had sued H&M in 2016, accusing it of violating New York’s False Claims Act.

In an announcement, his lawyer Daniel Miller stated taxpayers “must be grateful” for his consumer’s efforts.

Clients with unused H&M present playing cards issued between 2004 and 2014 can use them at H&M, or file a declare with New York’s Office of Unclaimed Funds.

($1 = 9.90 SEK)

Reporting by Jonathan Stempel in New York; Enhancing by Chizu Nomiyama, Invoice Berkrot and Bernard Orr

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