RI Department of State Business Services Protections Bill Passed by General Assembly

RHODE ISLAND, June 8 - PROVIDENCE, RI – Secretary of State Gregg M. Amore today applauded the passage of legislation that combats several forms of business identity theft, helps prevent business scams, and assists individuals and businesses who have been impacted by fraud.

"The RI Department of State's Business Services Division works every day to make it easier to start and maintain a business or non-profit in Rhode Island, but unfortunately, bad actors continue to find new ways to make things harder or more expensive," said Secretary of State Gregg M. Amore. "This legislation enables my office to take action to protect business owners, and implements protections to make sure filers aren't tricked into paying unnecessary fees. I thank the General Assembly for their support of this important legislation."

Among other provisions, the legislation, sponsored in the House (H 8324 Sub A) by Chair Mary Ann Shallcross Smith and in the Senate (S 3212 Sub A) by Chair Robert Britto, addresses two forms of fraudulent activity:

1. Unauthorized filings submitted to the RI Department of State to form new business entities using individuals' names and addresses as "registered agents" and/or "authorized person(s)" without their consent; and

2. Deceptive solicitations or mailings that are sent to entities registered with the Department's Business Services Division to offer annual report filing services for exorbitant fees, when, in fact, entities can file these reports directly with the Department without paying an additional "service" fee. Often, these mailings are designed to confuse the recipient by appearing as though they are coming from a government entity.

The legislation enables individuals and business owners whose identity has been fraudulently used to submit unauthorized filings to file a complaint with the RI Department of State and creates a process for the Department to remove illegitimate filings from the public record. Removing unauthorized filings helps limit the legal and financial impact for victims of fraudulent activities.

In addition, the legislation requires companies advertising paid filing services for RI Department of State filings to disclose that their communications are advertisements and are not from a government entity. The communications must also include information about how filers can conduct business directly with the RI Department of State, which ensures filers are not paying any unnecessary fees.

"This legislation really provides the Department of State with the tools needed to combat business identity theft, and to assist individual businesses. Fraudulent activity has become more sophisticated and more frequent, misleading businesses. These scams not only harm consumers and entrepreneurs but can affect credit and account security as well," said Sen. Robert Britto (D-Dist. 18, East Providence, Pawtucket).

"I'm gratified that this will enable the Secretary of State to identify and remove fraudulent filings from public records. The requirement for clear disclosures on solicitations will help ease a lot of confusion, protecting businesses, financial institutions and the economy," said Rep. Mary Ann Shallcross Smith (D-Dist. 46, Lincoln, Pawtucket).

The RI Department of State's Business Services Division maintains Rhode Island's business registry, which records new business formations and ongoing business registration activity for more than 110,355 active entities registered in the state. To learn more about services for businesses and non-profit entities in Rhode Island, visit https://www.sos.ri.gov/divisions/business-services.

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