Rhode Island Telephone Sales Solicitation Act
R.I. Gen. Laws § 5-61-1, et seq.
Rhode Island General Laws
Title 5 - Businesses and Professions
Chapter 61 Telephone Sales Solicitation Act
§ 5-61-1. "Telephone Sales Solicitation Act."
§ 5-61-2. Definitions.
§ 5-61-3. Registration.
§ 5-61-3.1. Security.
§ 5-61-3.2. Other grounds for denial of registration.
§ 5-61-3.3. General disclosures.
§ 5-61-3.4. Use of prerecorded or synthesized voice messages.
§ 5-61-3.5. Do not call lists.
§ 5-61-3.6. Hours of operation.
§ 5-61-4. Filing, information required.
§ 5-61-5. Criminal penalties.
§ 5-61-5.1. Remedies — Injunctive relief — Civil penalties.
§ 5-61-6. Severability.
§ 5-61-1. "Telephone Sales Solicitation Act."
As used in this chapter, "telephone solicitation" means the engagement of a telephone conversation for the purpose of encouraging a person to purchase personal property, investment opportunities, goods or services, or for the purpose of gathering information for sales solicitation.
History of Section.
P.L. 1987, ch. 227, § 1; P.L. 1991, ch. 327, § 1; P.L. 1999, ch. 456, § 1.
§ 5-61-2. Definitions.
As used in this chapter:
(1) "Department" means the department of attorney general.
(2) "Hours of operation" means Monday through Friday, except a state or federal holiday, nine o'clock (9:00 a.m.) to six o'clock (6:00 p.m.); Saturday ten o'clock (10:00 a.m.) to five o'clock (5:00 p.m.).
(3) "Item" means any goods and services and includes coupon books that are to be used with businesses other than the seller's business.
(4) "Owner" means a person who owns or controls ten percent (10%) or more of the equity of, or otherwise has claim to ten percent (10%) or more of the net income of, a telephonic seller.
(5) "Person" includes an individual, firm, association, corporation, partnership, joint venture, or any other business entity.
(6) "Principal" means an owner; an executive officer of a corporation; a general partner of a partnership; a sole proprietor of a sole proprietorship; a trustee of a trust; or any other individual with similar supervisory functions with respect to any person.
(7) "Purchaser" or "prospective purchaser" means a person who is solicited to become, or does become, obligated to a telephonic seller.
(8) "Salesperson" means any individual employed, appointed, or authorized by a telephonic seller, whether referred to by the telephonic seller as an agent, representative, or independent contractor, who attempts to solicit or solicits a sale on behalf of the telephonic seller. The principals of a seller are themselves salespersons if they solicit sales on behalf of the telephonic seller.
(9) "Telephonic seller" or "seller" means a person who, on his or her own behalf or through salespersons or through the use of an automatic-dialing-announcing device, causes a telephone solicitation, or attempted telephone solicitation, to occur that meets the criteria specified as follows:
(i) A telephone solicitation, or attempted telephone solicitation, where the telephonic seller initiates or engages in telephonic contact with a prospective purchaser and represents or implies one or more of the following:
(A) That a prospective purchaser who buys one or more items will also receive additional or other items, whether or not of the same type as purchased, without "further cost." For the purposes of this subdivision, "further cost" does not include actual postage or common carrier delivery charges, if any;
(B) That a prospective purchaser will receive a prize or gift if the person also encourages the prospective purchaser to purchase or rent any goods or services or pay any money, including, but not limited to, a delivery or handling charge;
(C) That a prospective purchaser who buys office equipment or supplies will, because of some unusual event or imminent price increase, be able to buy these items at prices that are below those that are usually charged or will be charged for the items;
(D) That the seller is a person other than the person he or she is;
(E) That the items for sale are manufactured or supplied by a person other than the actual manufacturer or supplier;
(F) That the seller is offering to sell the prospective purchaser any gold, silver, or other minerals, or any interest in oil, gas, or mineral field, wells, or exploration sites.
(ii) Solicitation or attempted solicitation that is made by telephone in response to inquiries generated by advertisements or other form of mail or any types of unrequested mailing or advertisement sent by the seller that requires a consumer to respond telephonically for further information where it is revealed that the seller is offering to sell to the prospective purchaser on behalf of the telephonic seller where it is represented or implied that the seller is offering to sell to the prospective purchaser any gold, silver, or other metals; diamonds, rubies, sapphires, or other stones; coal or other minerals; or any interest in oil, gas, or mineral fields, wells, or exploration sites; or that the seller is offering to sell any goods or services not specifically exempted in subsection (10).
(10) For purposes of this section, "telephonic seller" or "seller" does not include any of the following:
(i) A person selling a security that has been qualified for sale by the director of business regulation pursuant to § 7-11-301 et seq., or is exempt under § 7-11-401 et seq. from the necessity to qualify.
(ii) A person licensed pursuant to § 5-20.5-6, when the solicited transaction is governed by that law.
(iii) A person licensed pursuant to chapter 1.2 of title 7, when the solicited transaction is governed by that law.
(iv) A person soliciting the sale of a franchise that is registered pursuant to § 19-28.1-5 or is exempt under § 19-28.1-6 from the necessity of registering.
(v) A person primarily soliciting the sale of a newspaper of general circulation, as defined in § 9-19.1-1, a magazine or periodical, or contractual plans, including book and record clubs: (A) Under which the seller provides the consumer with a form that the consumer may use to instruct the seller not to ship the offered merchandise, and that is regulated by the Federal Trade Commission trade regulation rule concerning "Use of Negative Option Plans by Sellers in Commerce, 16 C.F.R. Part 425"; or (B) Not covered under subsection (10)(v)(A), such as continuity plans, subscription arrangements, standing-order arrangements, supplements, and series arrangements under which the seller periodically ships merchandise to a consumer who has consented in advance to receive the merchandise on a periodic basis.
(vi) A person soliciting business from prospective purchasers who have previously purchased from the person making the solicitation or the business enterprise for which the person is calling.
(vii) Any supervised financial institution or parent, subsidiary, or affiliate. As used in this paragraph, "supervised financial institution" means any commercial bank, trust company, savings and loan association, credit union, industrial loan company, personal property broker, consumer finance lender, commercial finance lender, or insurer; provided, that the institution is subject to supervision by an official or agency of this state or of the United States.
(viii) A person soliciting the sale of services provided by a cable television system licensed or franchised pursuant to chapter 19 of title 39.
(ix) A person or affiliate of a person whose business is regulated by the public utilities commission.
(x) A person soliciting the sale of a farm product, as defined in § 43-3-18, if the solicitation neither intends to, nor actually results in, a sale that costs the purchaser in excess of one hundred dollars ($100).
(xi) An issuer, or subsidiary of an issuer, that has a class of securities subject to § 12 of the Securities Exchange Act of 1934, 15 U.S.C. § 78l, and that is either registered or exempt from registration under paragraph (A), (B), (C), (E), (F), (G), or (H) of subsection (g) of that section.
(xii) A person soliciting sales that are exempted under § 6-13-5 (Unfair Sales Practices) or § 6-13.1-4 (Deceptive Trade Practices).
(xiii) A person soliciting exclusively the sale of telephone answering services to be provided by that person or that person's employer.
History of Section.
P.L. 1987, ch. 227, § 1; P.L. 1991, ch. 327, § 1; P.L. 1999, ch. 456, § 1; P.L. 2005, ch. 36, § 1; P.L. 2005, ch. 72, § 1.
§ 5-61-3. Registration.
(a) Not less than ten (10) days prior to doing business in this state, a telephone sales solicitation operation or telephonic seller shall register with the department by filing with the consumer protection unit of the department the information required by § 5-61-4 and a filing fee of one hundred dollars ($100). A seller is deemed to do business in this state if the seller solicits prospective purchasers from locations in this state or solicits prospective purchasers who are located in this state. The information required by § 5-61-4 shall be submitted on a form provided by the attorney general. The information shall be verified by a declaration signed by each principal of the telephone sales solicitation operation under penalty of perjury. The declaration shall specify the date and location of signing. Information submitted pursuant to § 5-61-4(10) or (11) shall be clearly identified and appended to the filing.
(b) Registration of a telephone sales solicitation business shall be valid for one year from its effective date and may be annually renewed by making the filing required by § 5-61-4 and paying a filing fee of one hundred dollars ($100), which shall be deposited into the general fund as general revenue.
(c) Whenever, prior to expiration of a seller's annual registration, there is a material change in the information required by § 5-61-4, the seller, within ten (10) days, shall file an addendum updating the information with the consumer protection unit of the department. Changes in salespersons soliciting on behalf of the seller shall be updated by addendums filed, if necessary, in quarterly intervals computed from the effective date of registration.
(d) Upon receipt of a filing and filing fee pursuant to subsection (a) or (b) of this section, the department shall send the telephonic seller a written confirmation of receipt of the filing no later than ten (10) business days. If the seller has more than one business location, the written confirmation shall be sent to the principal business location identified in the seller's filing and the seller may make copies so that the seller has one for each business location. The seller shall post the confirmation of receipt of filing, within ten (10) days of receipt, in a conspicuous place at each of the seller's business locations. The seller shall not commence any telephone solicitations until the time that the written confirmation is received.
(e) The consumer protection unit of the department of attorney general may delay, reject, or revoke a registration upon review of the information contained in the filing of the registration form, or as a result of information relating to the conduct of the business operation.
History of Section.
P.L. 1987, ch. 227, § 1; P.L. 1991, ch. 327, § 1; P.L. 1998, ch. 14, § 8.
§ 5-61-3.1. Security.
(a) Each telephonic seller, pursuant to the provisions of this chapter, shall deliver and file with the consumer protection unit of the department before a confirmation of registration shall be issued or re-issued:
(1) A surety bond, written by a company recognized and approved by the commissioner of insurance within the department of business regulation and approved by that department with respect to its form, manner of execution, and sufficiency in due form to the state of Rhode Island; or
(2) An irrevocable letter of credit issued for the benefit of the telephonic seller by a bank whose deposits are insured by an agency of the federal government; or
(3) A certificate of deposit in a financial institution insured by an agency of the federal government that may be withdrawn only on the order of the department, except that the interest may accrue to the telephonic seller.
(b) The amount of bond, letter of credit, or certificate of deposit must be a minimum of thirty thousand dollars ($30,000). The department may, at its discretion, establish a bond of greater amount to ensure the general welfare of the public.
(c) The security set forth in subsection (a) of this section shall be limited to indemnify the purchaser only for actual damages. This security shall neither limit nor impair any right of recovery otherwise available pursuant to law, nor shall the amount of security be relevant in determining the amount of damage or other relief to which any purchaser shall be entitled. The security shall be accessible only after all other legal remedies have been exhausted. In the event the security is exhausted, the telephonic seller shall immediately notify the department, which shall cause any public notice that it deems appropriate to be given immediately.
History of Section.
P.L. 1999, ch. 456, § 2.
§ 5-61-3.2. Other grounds for denial of registration.
The department may delay, reject, or revoke a registration if the department finds that a telephonic seller or any person applying for registration as a telephonic seller, including, but not limited to, owners, operators, officers, directors, partners, or other individuals engaged in the management activities of a business entity:
(1) Has been convicted or found guilty of, or has entered a plea of guilty or a plea of nolo contendere to, racketeering or any offense involving fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property;
(2) For purposes of this section, a plea of nolo contendere is a conviction;
(3) Has had entered against him or her or an affiliated business, an injunction, a temporary restraining order, or a final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document, in any civil or administrative action involving racketeering, fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property or the use of any untrue or misleading representations in an attempt to sell or dispose of real or personal property or the use of any unfair, unlawful, or deceptive trade practice;
(4) Is subject to, or has been affiliated with, any company that is, or ever has been, subject to any injunction, temporary restraining order, or final judgment or order, including a stipulated judgment or order, an assurance of voluntary compliance, or any similar document, or any restrictive court order relating to a business activity as the result of any action brought by a governmental agency, including any action affecting any license to do business or practice an occupation or trade;
(5) Has at any time during the previous seven (7) years filed for bankruptcy, been adjudged bankrupt, or been reorganized because of insolvency;
(6) Has been a principal, director, officer, or trustee of, or a general or limited partner in, or had responsibilities as a manager in, any corporation, partnership, joint venture, or other entity that filed for bankruptcy, was adjudged bankrupt, or was reorganized because of insolvency within one year after the person held that position;
(7) Has been previously convicted of, or found to have been, acting as a salesperson or telephonic seller without a registration or whose registration has previously been refused, revoked, or suspended in any jurisdiction;
(8) Falsifies or willfully omits any material information asked for in any application, document, or record required to be submitted or retained under this chapter;
(9) Makes a material false statement in response to any request or investigation by the department;
(10) Refuses or fails, after notice, to produce any document or record or disclose any information required to be produced or disclosed under this chapter or the rules of the department; or
(11) Otherwise violates or is operating in violation of any of the provisions of this chapter or of the rules adopted or court orders issued pursuant to the provisions of this chapter.
History of Section.
P.L. 1999, ch. 456, § 2; P.L. 2021, ch. 400, § 18, effective July 13, 2021; P.L. 2021, ch. 401, § 18, effective July 13, 2021.
§ 5-61-3.3. General disclosures.
(a) Within the first thirty (30) seconds of a telephone call, a telephonic seller or salesperson shall identify herself or himself by stating her or his true name, the company on whose behalf the solicitation is being made, and the consumer goods or services being sold.
(b) If a sale or an agreement to purchase is completed, the telephonic seller must inform the purchaser of her or his cancellation rights as provided in this chapter; state the registration number issued by the department for both the telephonic seller and the salesperson; and give the street address of the telephonic seller.
(c) All oral disclosures required by this section shall be made in a clear and intelligible manner.
History of Section.
P.L. 1999, ch. 456, § 2.
§ 5-61-3.4. Use of prerecorded or synthesized voice messages.
(a) A telephonic seller shall not use or connect to a telephone line an automatic-dialing-announcing device unless: (1) The subscriber has knowingly or voluntarily requested, consented to, permitted, or authorized receipt of the message; or (2) The message is immediately preceded by a live operator who obtains the subscriber's consent before the message is delivered.
(b) This section does not apply to:
(1) Recorded messages from school districts to students, parents, or employees; or
(2) Messages advising employees of work schedules.
(c) Whenever the message is preceded by a live operator, the operator must, at the outset of the message, disclose:
(1) The name of the business, firm, organization, association, partnership, or entity for which the message is being made;
(2) The purpose of the message;
(3) The identity or kinds of goods or services the message is promoting; and
(4) If applicable, the fact that the message intends to solicit payment or commitment of funds.
(d) A telephonic seller shall not use an automatic-dialing-announcing device to make calls into or within this state, unless the device is designed and operated so as to create a disconnect signal or an on-hook condition that allows the subscriber's line to be released within five (5) seconds after termination of the telephone call by the subscriber.
History of Section.
P.L. 1999, ch. 456, § 2.
§ 5-61-3.5. Do not call lists.
(a) No salesperson or telephonic seller shall make, or cause to be made, any unsolicited telephonic sales calls to any residential, mobile, or telephonic-paging-device telephone number unless the salesperson or telephonic seller has instituted procedures for maintaining a list of persons who do not wish to receive telephonic sales calls made by or on behalf of that person, in compliance with 47 C.F.R. Part 64 or 16 C.F.R. Part 310. Additionally, no person or entity conducting business in this state shall transmit, or cause to be transmitted, a text message advertisement to a cellular telephone or pager equipped with short message capability or any similar capability allowing the transmission of text messages. A text message advertisement is a message, the principal purpose of which is to promote the sale of goods or services to the recipient, consisting of advertising material for the lease, sale, rental, gift, offer, or disposition of realty, goods, services, or extension of credit.
(1) This section shall apply when a text message advertisement is transmitted to a telephone number assigned for a cellular telephone or pager service to a Rhode Island resident.
(2) This section shall not apply to text messages transmitted at the direction of a person or entity offering cellular telephone or pager service if the subscriber is offered an option not to receive those text messages.
(3) This section shall not apply to text messages transmitted by a business that has an existing relationship with the subscriber if the subscriber is offered an option not to receive text messages from that business.
(4) This section shall not apply to text messages transmitted by an affiliate of a business that has an existing relationship with the subscriber, but only if the subscriber has provided consent to the business with which he or she has the relationship to receive text messages from affiliates of that business. "Affiliate" means any company that controls, is controlled by, or is under the common control with, another company.
(5) This section shall not impose an obligation on a person or entity offering cellular or pager service to control the transmission of a text message unless the message is transmitted at the direction of that person or entity.
(b) Any person who violates any provision of this section is guilty of a misdemeanor, and upon conviction, shall be punished by a fine of not more than five hundred dollars ($500) per violation.
History of Section.
P.L. 1999, ch. 456, § 2; P.L. 2003, ch. 98, § 1; P.L. 2003, ch. 216, § 1.
§ 5-61-3.6. Hours of operation.
(a) No salesperson or telephonic seller shall make or cause to be made any unsolicited telephonic sales calls to any residential, mobile, or telephonic-paging-device telephone number except during hours of operation, as defined in § 5-61-2(2).
(b) Any person who violates any provision of this section is guilty of a misdemeanor, and upon conviction, shall be punished by a fine of not more than five hundred dollars ($500) per violation.
History of Section.
P.L. 1999, ch. 456, § 2.
§ 5-61-4. Filing, information required.
Each filing pursuant to § 5-61-3 shall contain the following information:
(1) The name or names of the seller, including the name under which the seller is doing or intends to do business, if different from the name of the seller, and the name of any parent or affiliated organization:
(i) That will engage in business transactions with purchasers relating to sales solicited by the seller; or
(ii) That accepts responsibility for statements made by or acts of the seller relating to sales solicited by the seller.
(2) The seller's business form and place of organization and, if the seller is a corporation, a copy of its articles of incorporation and bylaws and amendments, or, if a partnership, a copy of the partnership agreement, or if operating under a fictitious business name, the location where the fictitious name is registered. All the same information shall be included for any parent or affiliated organization disclosed pursuant to subsection (1) of this section.
(3) The complete street address or addresses of all locations, designating the principal location from which the telephonic seller will be conducting business. If the principal business location of the seller is not in this state, then the seller shall also designate which of its locations within the state is its main location in the state.
(4) A listing of all telephone numbers to be used by the seller and the address where each telephone using each of these telephone numbers is located.
(5) The name of, and the office held by, the seller's officers, directors, trustees, general and limited partners, sole proprietor, and owners, and the names of those persons who have management responsibilities in connection with the seller's business activities.
(6) The complete address of the principal residence, the date and place of birth, and the driver's license number and state of issuance of each of the persons whose names are disclosed pursuant to subsection (5) of this section.
(7) The name and principal residence address of each person the telephonic seller leaves in charge at each location from which the seller does business in this state, as defined in § 5-61-1, and the business location for which each of these persons is or will be in charge.
(8) A statement, meeting the requirements of this subsection, as to any person identified pursuant to subsection (5) or (7) of this section who:
(i) (A) Has been convicted of a felony or misdemeanor involving an alleged violation of this section, or fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property;
(B) For purposes of this subsection (8)(i), a plea of nolo contendere is a conviction;
(ii) Has had entered against him or her a final judgment or order in a civil or administrative action, including a stipulated judgment or order, if the complaint or petition in the civil or administrative action alleged acts constituting a violation of this section, fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property, the use of untrue or misleading representations in an attempt to sell or dispose of real or personal property, or the use of unfair, unlawful, or deceptive business practices;
(iii) Is subject to any currently effective injunction or restrictive court order relating to business activity as the result of an action brought by a federal, state, or local public agency or unit including, but not limited to, an action affecting any vocational license;
(iv) (A) Has at any time during the previous seven (7) tax years filed in bankruptcy; been adjudged a bankrupt; been reorganized due to insolvency; or been a principal director, officer, trustee, general or limited partner or had management responsibilities of any other corporation, partnership, joint venture, or business entity, that has filed or was adjudicated or reorganized during or within one year after the period that the person held that position.
(B) For the purposes of subsections 8(i), (8)(ii), and (8)(iii), the statement required by subsection (8) shall identify the person, the court, or administrative agency rendering the conviction, judgment, or order; the docket number of the matter; the date of the conviction, judgment, or order; and the name of the governmental agency, if any, that brought the action resulting in the conviction, judgment, or order. For the purposes of this subsection (8)(iv), the statement required by subsection (8) shall include the name and location of the person filing in bankruptcy, adjudged a bankrupt, or reorganized due to insolvency, and shall include the date thereof, the court that exercised jurisdiction, and the docket number of the matter.
(9) A list of names, including date of birth and place of birth and principal residence addresses, of salespersons who solicit on behalf of the telephonic seller and the names the salespersons use while soliciting.
(10) A copy of all sales information and literature (including, but not limited to, scripts, outlines, instructions, and information regarding how to conduct telephonic sales, sample introductions, sample closings, product information, and contest or premium-award information) provided by the telephonic seller to salespersons, or of which the seller informs the salespersons, and a copy of all written materials the seller sends to any prospective or actual purchaser.
(11) If the telephonic seller represents or implies, or directs salespersons to represent or imply, to purchasers that the purchaser will receive certain specific items or one or more items from among bonuses, prizes, or otherwise, the filing shall include the following:
(i) A list of the items offered;
(ii) The value or worth of each item described to prospective purchasers and the basis for the valuation;
(iii) The price paid by the telephonic seller to its supplier for each of these items and the name, address, and telephone number of each item's supplier;
(iv) If the purchaser is to receive fewer than all of the items described by the seller, the filing shall include the following:
(A) The manner in which the telephonic seller decides which item or items a particular prospective purchaser is to receive;
(B) The odds a single prospective purchaser has of receiving each described item;
(C) The name and address of each recipient who has, during the preceding 12 months (or if the seller has not been in business that long, during the period the telephonic seller has been in business) received the item having the greatest value and the item with the smallest odds of being received; and
(v) All rules, regulations, terms, and conditions a prospective purchaser must meet in order to receive the item.
(12) If the telephonic seller is offering to sell any metal, stone, or mineral, the filing shall include the following:
(i) The name, address, and telephone number of each of the seller's suppliers and a description of each metal, stone, or mineral provided by the supplier;
(ii) If possession of any metal, stone, or mineral is to be retained by the seller or will not be transferred to the purchaser until the purchaser has paid in full, the filing shall include the following:
(A) The address of each location where the metal, stone, or mineral will be kept;
(B) If not kept on premises owned by the seller or at an address or addresses set forth in compliance with subsection (12)(ii)(C), the name of the owner of the business at which the metal, stone, or mineral will be kept; and
(C) A copy of any contract or other document that evidences the seller's right to store the metal, stone, or mineral at the address or addresses designated pursuant to subsection (12)(ii)(A);
(iii) If the seller is not selling the metal, stone, or mineral from its own inventory, but instead purchases the metal, stone, or mineral to fill orders taken from purchases, the filing shall include copies of all contracts or other documents evidencing the seller's ability to call upon suppliers to fill the seller's orders;
(iv) If the seller represents to purchasers that the seller has insurance or a surety bond of any type relating to a purchaser's purchase of any metal, stone, or mineral from the seller, the filing shall include a complete copy of all these insurance policies and bonds; and
(v) If the seller makes any representation as to the earning or profit potential of purchases of any metal, stone, or mineral, the filing shall include data to substantiate the claims made. If the representation relates to previous sales made by the seller or a related entity, substantiating data shall be based on the experiences of at least fifty percent (50%) of the persons who have purchased the particular metal, stone, or mineral from the seller or related entity during the preceding six months (or if the seller or related entity has not been in business that long, during the period the seller or related entity has been in business) and shall include the raw data upon which the representation is based, including, but not limited to, all of the following:
(A) The length of time the seller or related entity has been selling the particular metal, stone or mineral being offered;
(B) The number of purchasers from the seller or related entity known to the seller or related entity to have made at least the same earnings or profit as those represented; and
(C) The percentage that the number disclosed pursuant to subsection (12)(v)(B) represents of the total number of purchasers from the seller or related entity of the particular metal, stone, or mineral.
(13) If the telephonic seller is offering to sell an interest in oil, gas, or mineral fields, wells, or exploration sites, the filing shall include disclosure of the following:
(i) The seller's ownership interest, if any, in each field, well, or site being offered for sale;
(ii) The total number of interests to be sold in each field, well, or site being offered for sale;
(iii) If, in selling an interest in any particular field, well, or site, reference is made to an investigation of these fields, wells, or sites by the seller or anyone else, the filing shall include the following:
(A) The name, business address, telephone number, and professional credentials of the person or persons who made the investigation; and
(B) A copy of the report and documents relating to the investigation prepared by the person or persons;
(iv) If the seller makes any representation as to the earning or profit potential of purchases of any interest in these fields, wells, or sites, the filing shall include data to substantiate the claims made. If the representation relates to previous sales made by the seller or related entity, then substantiating data shall be based on the experiences of at least fifty percent (50%) of the purchasers of the particular interests from the seller or the related entity during the preceding six months (or if the seller has not been in business that long, during the period the seller or related entity has been in business) and shall include the raw data upon which the representation is based, including, but not limited to, all of the following:
(A) The length of time the seller or related entity has been selling the particular interests in the fields, wells, or sites being offered;
(B) The number of purchasers of the particular interests from the seller or related entity known to the seller to have made, at least the same earnings as those represented; and
(C) The percentage the number disclosed pursuant to subsection (13)(iv)(B) represents of the total number of purchasers of the particular interests from the seller or related entity.
History of Section.
P.L. 1987, ch. 227, § 1; P.L. 1991, ch. 327, § 1; P.L. 2009, ch. 310, § 39.
§ 5-61-5. Criminal penalties.
Any person including, but not limited to, the seller, a salesperson, agent or representative of the seller, or an independent contractor, who willfully violates any provision of this chapter or who directly or indirectly employs any device, scheme, or artifice to deceive in connection with the offer or sale by any telephonic seller, or who willfully, directly, or indirectly, engages in any act, practice, or course of business that operates or would operate as a fraud or deceit upon any person in connection with a sale by any telephonic seller, upon conviction, shall be punished as follows:
(1) By a fine not exceeding ten thousand dollars ($10,000) for each unlawful transaction;
(2) By imprisonment in the state prison for not more than one year; or
(3) By both fine and imprisonment specified in subsections (1) and (2).
History of Section.
P.L. 1987, ch. 227, § 1; P.L. 1999, ch. 456, § 1.
§ 5-61-5.1. Remedies — Injunctive relief — Civil penalties.
(a) Any purchaser may have a right of action against a telephonic seller who is in material violation of this chapter. The purchaser may recover triple the amount actually paid to the telephonic seller. In addition to any judgment awarded to the purchaser, the court may allow reasonable attorney's fees to be taxed as cost.
(b) The superior court of this state shall have jurisdiction to prevent and restrain violations of this chapter. The court may issue appropriate decrees upon consent and stipulation by the parties. The court may also issue restraining orders. Under no circumstances shall the state be required to post bond in any action under this section.
(c) The department may institute proceedings to prevent and restrain violations of this chapter, as provided in subsection (b).
(d) The department may bring an action to obtain a declaratory judgment that an act or practice violates the provisions of this chapter.
(e) Any person may institute proceedings for injunctive relief, temporary or permanent, as provided in subsection (b), against threatened loss or damage by a violation of this chapter. A preliminary injunction may be issued upon a showing that the danger of irreparable loss or damage is immediate and, within the court's discretion, the execution of a property bond against damages for an injunction improvidently granted. If the court issues a permanent injunction, the plaintiff shall be awarded reasonable attorney's fees, filing fees, and reasonable costs of the suit. Reasonable costs of the suit may include, but not be limited to, the expenses of discovery and document production.
(f) In any action brought under this section, the court may make appropriate orders, including appointment of a master or receiver or sequestration of assets, to reimburse purchasers found to have been damaged; to carry out a transaction in accordance with the purchaser's reasonable expectations; or to grant other appropriate relief. The court may assess expenses of a master or receiver against a telephonic seller.
(g) In addition to injunctive relief authorized pursuant to subsection (b), any person, firm, corporation, or other entity who violates this chapter may be liable for a civil penalty in a suit by the department of not more than ten thousand dollars ($10,000) for each violation. The department or the court may waive any civil penalty or other fines or costs if the person has previously made full restitution or reimbursement or has paid actual damages to the purchasers who have been injured by the unlawful act or practice.
History of Section.
P.L. 1999, ch. 456, § 2.
§ 5-61-6. Severability.
If any provision of this chapter or any rule or regulation made under this chapter, or the application of this chapter to any person or circumstance is held invalid by any court of competent jurisdiction, the remainder of the chapter, rule, or regulation and the application of the provision to other persons or circumstances shall not be affected. The invalidity of any section or sections or parts of any section of this chapter shall not affect the validity of the remainder of the chapter.
History of Section.
P.L. 1987, ch. 227, § 1.
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