H&M will pay $36 million to settle accusations that the fashion retailer illegally kept millions of dollars in gift vouchers that clients never used, New York Attorney General Letitia James said on Thursday. The Swedish organization, whose full name is H&M Hennes & Mauritz AB, will pay $28.26 million to the state and $7.74 million to a whistleblower, William French. James said H&M had starting around 2008 unlawfully kept something like $18.4 million in unused gift voucher balances in its own bank accounts, instead of transferring them to the state’s Abandoned Property Fund.
James 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.
New York law requires gift card issuers to turn over unused card balances to the fund after five years of inactivity.
“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.”
The company had no comment on the settlement.
H&M, based in Stockholm, specializes in “fast fashion.” It did not admit or deny wrongdoing in agreeing to settle.
H&M 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.
In a statement, his lawyer Daniel Miller said taxpayers “should be thankful” for his client’s efforts.
- H&M agrees to $36 million settlement with New York over unused gift cards
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