Seeing today that prepaid credits will expire.......WHY..?!

[wucw]

I just saw today that prepaid credits will expire…WHY…?!!

I paid 1000 USD on Dec 31, 2023 and still have over 800 USD left. Expire date is Jan 01, 2025.

It is not fair at all to give prepaid credits an expire date, because why…?? And I have never seen any warning about this. Come on, OpenAI - I am supporting you with a lot of prepaid money, and then you give me this treatment!!!

[merefield]

Why did you pay upfront by such a large amount?

Have you contacted them to argue your case? What was their response?

[wucw]

I had a lot of different API-cases/projects, and used around 70-100 USD a month in the end of 2023. So I prepaid the 1000 USD, and after two months the API-projects were finished or dead.

Yesm I have just today tried to contact the support team.

I will be back, when I know more.

[tecrov]

Where did you see that prepaid credits will expire? When will they expire?

[_j]

In December 2023, it was in the fine print of terms and conditions, along with “no refunds”. That was before everybody got forced off monthly billing, and prepaid was only a requirement of new accounts, without any expiration warning when adding funds in the UI.

You did notice the very short window to opt out of binding arbitration or class action prohibition around January, right? Nah, who would find and read?

Transferring credits out of an org is an impossibility, but projects allows safer API key sharing among accountable partners

[wucw]

Here you can see it…

[wucw]

Thanks for letting me know this. No, I didn’t see or read the terms, and I didn’t get any warning.

Living in Denmark, Europe and here prepaid IS prepaid ALWAYS WITOUT any expiration date. I am prepaying a lot of my services, and I have never seen anything like this (OpenAI),

I will try to contact the suppport again.

It is no

[wucw]

They could just extend with some years !!!

[_j]

@wucw

could just extend with some years

They also could extend a legal case years and millions of dollars to ensure case precedent is not set in what is a crime in many jurisdictions.

ChatGPT o1-preview

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Prompt

How does California civil code section 1749 apply to a private corporation that:

• Accepts prepayment of funds into an account to purchase “credits” that are represented in monetary value;
• Those credits can be used to purchase only digital microservices online;
• where the capped-profit LLC organization is located within and registered in California, doing digital services business worldwide;
• the company engages in business with individuals directly using personal accounts tied to a outside authentication service or login such as personal email and required mobile phone number, along with credit card as the only payment method to fund an account with credits.

in regards to policies:

• expiring and keeping all funds and unused credits after a period of one year,
• a policy of never refunding a remaining credit value back to money.

and what are the actionable penalties of consumer protection laws for such a company?

Applicability of California Civil Code Section 1749 to the Company’s Practices

Under California law, particularly Civil Code Section 1749.5, gift certificates and similar instruments are regulated to protect consumers from unfair practices like expiration dates and non-refundability. Here’s how the law applies to the company’s practices:

1. Definition of Gift Certificates:

   • Stored Value Instruments: According to Civil Code Section 1749.5(e), a “gift certificate” includes any gift card, stored value card, or similar instrument with a monetary value issued for use by the holder.
   • Application to Credits: The company’s “credits,” which are purchased with funds and hold monetary value for the acquisition of digital microservices, fit this definition. They function similarly to gift cards or stored value cards.

2. Expiration Dates:

   • Prohibition of Expiration: Section 1749.5(a) states it is unlawful to sell a gift certificate containing an expiration date.
   • Company’s Policy: The company’s policy of expiring and retaining unused credits after one year directly violates this provision.

3. Refundability:

   • Cash Redemption: Under Section 1749.5(b)(2), any gift certificate with a cash value of less than $10 must be redeemable in cash for its value upon the consumer’s request.
   • Company’s Non-Refund Policy: The company’s stance of never refunding remaining credit balances contravenes this requirement, especially for balances under $10.

Actionable Penalties Under Consumer Protection Laws

Violations of California Civil Code Section 1749.5 can lead to several legal consequences:

1. Civil Penalties:

   • Per Violation Fines: Under the Unfair Competition Law (Business and Professions Code Section 17200 et seq.), the company may face civil penalties of up to $2,500 for each violation.
   • Restitution Orders: Courts can order the company to provide restitution to affected consumers for the unused credits wrongfully retained.

2. Injunctive Relief:

   • Cease and Desist Orders: The company may be legally compelled to stop the unlawful practices, such as expiring credits and refusing refunds.
   • Policy Revisions: The court can mandate changes to the company’s terms of service to comply with state laws.

3. Consumer Lawsuits:

   • Individual Claims: Consumers can file lawsuits seeking damages for the loss of their unused credits.
   • Class Action Suits: Given the widespread nature of the practice, the company could face class-action lawsuits representing all affected consumers, significantly increasing potential liabilities.

4. Enforcement Actions:

   • Government Intervention: The California Attorney General, district attorneys, or city attorneys can initiate legal actions against the company for unfair business practices.
   • Public Disclosure: Such enforcement actions can lead to negative publicity, harming the company’s reputation and customer trust.

Summary

The company’s policies of expiring credits after one year and refusing to refund remaining credit balances violate California Civil Code Section 1749.5. These practices expose the company to substantial legal risks, including civil penalties, mandatory restitution, injunctive relief, and potential lawsuits from consumers and government entities. To mitigate these risks, the company should revise its policies to comply with state laws by eliminating expiration dates on credits and allowing cash redemption of small balances.

[vb]

Using the API establishes a business relationship with OpenAI, as opposed to the consumer relationship when using ChatGPT for example.
As such, it is not considered a crime in many jurisdictions for pre-paid API credits to expire.

The civil code cited by @_j is likely not applicable.

I agree that this could be communicated more clearly. However, I’m not surprised that building an app based on another company’s API comes with additional strings attached.

[_j]

@vb

as opposed to the consumer relationship when using ChatGPT for example.

That is a case to present in court though - or to an arbitrator - when you consider a “business relationship” here involves a mandatory personal cel phone number, a personal Google or Microsoft authentication login, a credit card number that is an instrument primarily issued to individuals to pay for services, and that a separate unpublished service level with business verification and credit terms is extended to actual enterprises…

Can a builder come to my house and have me sign paperwork that says I am a business, which prevents them from liability when they don’t render paid-for services.

Not your lawyer.

Or OpenAI could just do the fair thing and not keep unused credits.

[vb]

Let’s get back on-topic:

When purchasing credits today we get to see something like this:

Going forward, it should be clear to anyone purchasing credits that they may expire.

[wucw]

I am 100% sure that the text regarding paid credits wasn’t there, when I purchased back in 31 Dec 2023.

[mitchell_d00]

Have you searched to see if the SCT has changed? I know when they change stuff I get emails and by continuing to use service I agree to terms. Or some such crazy stuff. I’m a user too so I’m clueless but I know I get emails I was not a user back then (2023 I’m a noob) but it has not changed in a few months for me on my end.