Proposed settlement would provide refunds for consumers who bought RadioShack gift cards
HARRISBURG - Attorney General Kathleen G. Kane today announced a proposed multistate settlement that would lead to 100 percent reimbursement for consumers who paid for RadioShack gift cards.
The settlement comes after RadioShack filed for bankruptcy earlier this year. Attorneys from the Pennsylvania Office of Attorney General's Bureau of Consumer Protection worked on the proposed settlement, which is currently supported by attorneys general from at least five other states.
The settlement, which requires approval of the U.S. Bankruptcy Court, applies to consumers nationwide and does not impose a minimum dollar threshold for consumer claims relating to unredeemed RadioShack gift cards. The settlement calls for RadioShack gift cards purchased by consumers to receive "priority" status, meaning preference will be given to these claims in the bankruptcy proceedings.
"We believe this settlement is in the best interest of consumers," Attorney General Kane said. "This would create a practical solution that would allow consumers who paid for these gift cards to fully recoup their money."
Under bankruptcy laws, there must be "consideration" for an unredeemed gift card to be treated as a priority claim eligible for the 100 percent refund. RadioShack gift cards purchased directly from RadioShack, or at other stores, are covered under the proposed settlement.
If the settlement is approved by the U.S. Bankruptcy Court, consumers will have 12 months after RadioShack's plan of liquidation goes into effect to file a simplified proof of claim form.
An independent professional claims agent company approved by and reporting to the bankruptcy court will be responsible for reviewing and processing the claims.
An escrow account with $500,000 will be established so that the first half million dollars' worth of priority unredeemed gift card claims will be paid promptly and will not be delayed in the bankruptcy process. In the event that priority gift card claims exceed that amount, additional funds will be provided, according to the proposed settlement.
This proposed agreement follows a previous settlement relating to the RadioShack bankruptcy. That settlement secured and protected consumers' personally identifiable information. It was negotiated by the states after mediation in U.S. Bankruptcy Court.
Commonwealth residents with questions about RadioShack gift cards and the proposed settlement are encouraged to contact the Office of Attorney General's Bureau of Consumer Protection at 800-441-2555.