Seller Beware: Changes to Rhode Island Consumer Protection Law

by Jared Sugerman | A change to Rhode Island’s consumer protection act could give rise to compliance questions for previously exempt businesses. The modification, which was signed into law by Rhode Island Governor Dan McKee in July, makes regulated businesses that were once immune from lawsuits for “unfair methods of competition and unfair or deceptive acts or practices” subject to actions brought by the State attorney general.

Rhode Island’s consumer protection act broadly prohibits unfair methods of competition and unfair or deceptive acts or practices in the conduct of trade or commerce. The act defines unfair methods of competition and unfair or deceptive acts or practices to include conduct likely to cause confusion or misunderstanding as to the source of goods or services, as well as representations that goods have characteristics that they do not have. One example of conduct that is specifically prohibited by the act is advertising brand name goods and then selling substituted brand names in place of those goods.

Attorney General Peter Neronha supported a change to the State’s consumer protection law. In 2021, Neronha advocated for reform that would allow his office to do more to combat unfair and deceptive practices. Businesses should prepare for the possibility that the attorney general will use the revised law to restrain such practices.

Prior to the recent enactment, Rhode Island was one of the so-called “terrible two,” whose unfair and deceptive acts and practices protections had been “gutted by court decisions that interpret the statute as being applicable to almost no consumer transactions,” per the National Consumer Law Center. For years, Rhode Island case law had held that businesses regulated by a governmental body, including such bodies as the building contractor’s regulation board, were immune from suit under the consumer protection statute. Now, only Michigan law maintains such an exemption.

If you have concerns about how Rhode Island’s modified consumer protection law could impact your business, or about how to defend yourself if an action is brought against you by the attorney general, contact Duffy & Sweeney at 401-455-0700. Or reach out to Jared Sugerman here.

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