H&M strikes $36 million deal with New York for unused gift cards

0

NEW YORK, May 19 (Reuters) – H&M will pay $36 million to settle charges that the fashion retailer illegally held millions of dollars in gift cards that customers never used, a prosecutor said on Thursday. General of New York, Letitia James.

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

James said H&M had since at least 2008 illegally kept at least $18.4 million in unused gift card balances in its own bank accounts, instead of transferring them to the state’s Abandoned Assets Fund.

Join now for FREE unlimited access to Reuters.com

Register

She also said H&M repeatedly lied about the missing transfers by saying an Ohio company, which had no obligation to send balances to New York, ran its gift card business.

“My office has zero tolerance for companies that break the law and line their pockets with money that belongs to hard-working people,” James said in a statement. “Breaking the law is not fashionable or tolerable.”

H&M, which specializes in “fast fashion”, has not admitted or denied wrongdoing in agreeing to pay. He made no immediate comment on the settlement.

The Stockholm-based company has around 4,800 stores worldwide and recorded net sales of 199 billion Swedish krona ($20.1 billion) in 2021, according to its website.

French had sued H&M in 2016, accusing it of violating New York’s False Claims Act and a law governing abandoned property. His lawyers did not immediately respond to requests for comment.

Customers with unused H&M gift cards issued between 2004 and 2014 can redeem them at H&M or file a claim with the New York Office of Unclaimed Funds.

($1 = SEK9.90)

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Jonathan Stempel in New York; Editing by Chizu Nomiyama and Bill Berkrot

Our standards: The Thomson Reuters Trust Principles.

Share.

Comments are closed.