(a)(1)  No person shall, in connection with the sale or lease or solicitation for sale or lease of goods, property or service, represent that another person has a chance to win or to receive a prize, gift, or item of value without clearly and conspicuously disclosing on whose behalf the contest or promotion is conducted, as well as all material conditions which a participant must satisfy. In an oral solicitation, all material conditions shall be disclosed prior to requesting the consumer to enter into the sale or lease. (2) Additionally, in any written material covered by the section, each of the following shall be clearly and prominently disclosed, either immediately adjacent to the first identification of the prize, gift, or item of value to which it refers; or in a separate section entitled “consumer disclosure” which title shall be printed in no less than ten (10) point bold face type and which section shall contain only a description of the prize, gift, or item of value and the disclosures outlined in subdivisions (a)(2)(i) — (a)(2)(iii):

(i)  The actual retail value of each item or prize, which for the purposes of this section shall be:

(A)  The price at which substantial sales of the item were made in the area in which the offer was received within the last ninety (90) days; or

(B)  The actual cost of the item of value, gift, or prize to the person on whose behalf the contest or promotion is conducted plus no more than seven hundred percent (700%), but in no case shall it exceed that person’s good faith estimate of the appraised retail value;

(ii)  The actual number of each item, gift, or prize to be awarded; and

(iii)  The odds of receiving each item, gift, or prize.

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Terms Used In Rhode Island General Laws 42-61.1-3

  • Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
  • in writing: include printing, engraving, lithographing, and photo-lithographing, and all other representations of words in letters of the usual form. See Rhode Island General Laws 43-3-16
  • item: means any item or service with monetary value. See Rhode Island General Laws 42-61.1-1
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Person: means any natural person, corporation, trust, partnership, association, and any other legal entity. See Rhode Island General Laws 42-61.1-1

(b)  All disclosures required by this chapter to be in writing shall comply with the following:

(1)  All dollar values shall be stated in arabic numerals and be preceded by a dollar sign ($);

(2)  The number of each item, gift or prize to be awarded and the odds of receiving each item, gift or prize shall be stated in arabic numerals and shall be written in a manner which is clear and understandable.

(c)  It shall be unlawful to notify a person that he or she will receive a gift, prize, or item of value that has as a condition of receiving the gift, prize, or item of value the requirement that the person pay any money, or purchase, lease, or rent any goods or services, unless there shall have been clearly and conspicuously disclosed the nature of the charges to be incurred, including, but not limited to, any shipping charge and handling charges. This disclosure shall be given:

(1)  On the face of any written materials; or

(2)  Prior to requesting or inviting the person to enter into the sale or lease in any oral notification.

(d)  The provisions of this section shall not apply where to be eligible:

(1)  Participants are asked only to complete and mail or deposit at a local retail commercial establishment, an entry blank obtainable locally or by mail, or to call in their entry by telephone; or

(2)  Participants are never required to listen to a sales presentation and never requested or required to pay any sum of money for any merchandise, service, or item of value.

(e)  Nothing in this section shall preclude from liability any publisher, owner, agent, or employee of a newspaper, periodical, radio station, or television station, who has knowledge or reasonably should have known that the dissemination of any advertisement or promotion governed by this section, violated the requirements of this section.

History of Section.
P.L. 1991, ch. 276, § 1.