H&M reaches $36 mln settlement with New York over unused gift cards
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H&M will pay $36 million to settle accusations that the fashion retailer illegally kept millions of dollars in gift cards that customers never used, New York Attorney General Letitia James said on Thursday.
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 a whistleblower, William French.
James said H&M has since at least 2008 unlawfully 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 Property Fund.
She also said H&M repeatedly lied about the missing transfers by saying an Ohio company, which had no obligation to send the balances to New York, handled its gift card business.
“My office has zero tolerance for companies that disregard the law and line their pockets with money that belongs to hardworking people,” James said in a statement. “Violating the law is not trendy or tolerable.”
H&M, which specializes in “fast fashion,” did not admit or deny wrongdoing in agreeing to settle. It had no immediate comment on the settlement.
The Stockholm-based company has about 4,800 stores worldwide, and posted 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 use them at H&M, or file a claim with New York’s Office of Unclaimed Funds.
($1 = 9.90 SEK)
SOURCE: REUTERS
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