Often names can be misleading. So it is potentially the case with the federal CARD Act that will come into effect in August 2010. Although the name implies that it applies to cards such as stored value cards and gift cards, this Federal law will apply more broadly and has provisions that impact virtual currency models. In particular, this act mandates minimum levels of consumer protection for fees, forfeiture and other issues that can arise in connection with virtual currency accounts.
With regard to the minimum protection imposed by this federal law, states are free to adopt their own regulations to provide even greater protection. Now more than ever it is important to ensure that if you are offering virtual currency as part of your business model, that you ensure that you are in compliance with federal, state and international laws.
For more information see the CARD Act Advisory prepared by members of Pillsbury’s Virtual Worlds team