The proposed "Third-Party Litigation Financing Consumer Protection Act" aims to comprehensively regulate the practices of third-party litigation financers in Rhode Island. The act introduces key definitions, including "consumer," "legal representative," and "litigation financer." It mandates that all litigation financers must register with the state, which involves submitting an application and a surety bond of at least $50,000.

Litigation financers are required to provide annual reports to the Secretary of State detailing their operations and transactions. To enhance consumer protection, the act prohibits certain practices by litigation financers, such as paying referral fees to legal representatives or medical providers, advertising false or misleading information, and interfering in the conduct of a consumer's legal claim.

Additionally, the act requires that all litigation financing contracts include specific disclosures to inform consumers of their rights and obligations. It clarifies that the act does not apply to litigation financing provided to commercial enterprises in support of commercial litigation, particularly in situations arising from personal injury claims.

The Secretary of State is designated as the regulatory authority responsible for ensuring compliance with the act. Notably, any violation of the act's terms will render the litigation financing contract unenforceable for all parties involved. The act is set to take effect immediately upon passage.