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Rhode Island Enacts Rebate Laws; New Fax Rules Took Effect August 1

The Rhode Island legislature recently approved three bills relating to consumer rebates (HB 6720, HB 6886, and SB 2120); the bills took effect in July without the governor's signature.

Under the new laws, it is an unfair trade practice to advertise the net price (i.e., the post-rebate price) of an item unless the rebate is made available by the retailer at the time of purchase. In addition, it is an unfair trade practice to refuse to accept a photocopy or "other reasonable facsimile" of an original sales receipt when a consumer is redeeming a rebate. Companies also may not limit rebates to one per household per item.

Amended Fax Rules Took Effect August 1
In April, the FCC issued amended rules relating to unsolicited fax advertisements, as required by the Junk Fax Prevention Act. These rules took effect August 1, 2006. (Please see our April 2006 Alert for background information and details on the amended rules.)

The amended rules prohibit sending unsolicited advertisements by fax to businesses and residences unless:

  1. there is an established business relationship (EBR) or the recipient has given express, prior consent to receive fax advertisements;
  2. the sender provides certain contact information and an opt-out notice; and
  3. the sender obtained the fax number in statutorily prescribed ways.

An EBR can be formed by an inquiry, application, purchase or transaction as long as it relates to products or services offered by the sender. (Not all inquiries meet this standard. For example, an inquiry about store location or hours or visiting a website without taking additional steps to request information would not form an EBR.) Keep in mind that the EBR exemption is available only to the entity who had the voluntary two-way communication with the recipient that established the EBR and does not extend to affiliates of such entity.

Senders bear the burden of proving the existence of an EBR and should therefore maintain records, such as purchase agreements, sales slips, inquiries and applications.

All fax advertisements must contain a notice on the first page of the advertisement that the recipient can opt out of receiving future unsolicited fax ads from the sender. The opt-out notice must be clear and conspicuous and must be separate from the advertising copy or other disclosures. This notice must contain a domestic telephone and fax number as well as at least one cost-free mechanism for sending an opt-out request.

In addition, all faxes (not just unsolicited ads) must also include the sender's identifying information on the top or bottom margin of every transmitted page, or on the first page of the fax. Each fax must clearly identify (1) the date and time the fax was sent, (2) the registered name of the company sending the fax, and (3) the telephone number of the company sending the fax or the sending fax machine's number.

Circular 230 Disclosure: To assure compliance with Treasury Department rules governing tax practice, we inform you that any advice (including in any attachment) (1) was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty that may be imposed on the taxpayer, and (2) may not be used in connection with promoting, marketing or recommending to another person any transaction or matter addressed herein.