Rhode Island Legislation Requiring Gift Card Retailers to Display a Scam Notice
Rhode Island is on the verge of enacting legislation that will require retailers to post a warning about gift card scams. Similar to legislation that was recently enacted in New York, companion bills S 759 and HB 5732 require sellers of gift cards to display a “conspicuous notice, in a form prescribed by the department of business regulation” at or near where gift cards are displayed and at or near where the sale occurs.
The warning must (1) caution purchasers about prepaid card scams and (2) instruct the purchaser on what to do if they believe they may be a victim of such a scam. Retailers who violate the law could be subject to a penalty of up to $250 per day per store.
Unfortunately, the bills as passed by the Rhode Island legislature provide that the law takes effect “upon passage.” However, the Rhode Island Department of Business Regulation has not yet published the required form warning disclosure. We will keep in contact with the State and get the form disclosure to you as soon as it is available, but we do not think that the State can assess penalties against retailers who fail to post the warning sign until after the Department publishes the required form and gives retailers a reasonable period of time to get the warning posted in its stores.
If you have any questions or would like to discuss the information provided in this Client Alert in more detail, please do not hesitate to contact us.
Jamie Ryan, at jryan@baileycav.com or (614) 229-3247; or
Jameel Turner, at jturner@baileycav.com or (614) 229-3260; or
Joan Colleran, at jcolleran@baileycav.com or (614) 229-3220.
