BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1581|
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THIRD READING
Bill No: AB 1581
Author: Wieckowski (D), et al.
Amended: 4/26/12 in Assembly
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 6-1, 6/11/12
AYES: Price, Emmerson, Corbett, Correa, Hernandez, Wyland
NOES: Strickland
NO VOTE RECORDED: Negrete McLeod, Vargas
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 60-11, 5/3/12 - See last page for vote
SUBJECT : Advertising: business location
representations: floral
businesses
SOURCE : Author
DIGEST : This bill makes it an infraction for a provider
or vendor of floral or ornamental products or services, as
defined, to misrepresent the geographic location of its
business, as specified.
ANALYSIS :
Existing law, the Business and Professions Code:
1. Regulates advertising, generally, and makes it unlawful
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for any person, firm, corporation or association, or any
employee to make any statement in any advertising which
is untrue or misleading, and which is known or, in the
exercise of reasonable care, should be known to be
untrue or misleading. (Business and Professions Code
(BPC) Section17500)
2. Provides that unfair competition includes any unlawful,
unfair or fraudulent business act or practice and
unfair, deceptive, untrue or misleading advertising and
other prohibited acts, as specified. (BPC Section
17200)
3. Provides that violation of the provisions above is a
misdemeanor, and that remedies for violations are
cumulative to each other and to other applicable
remedies. (BPC Section 17534 and 17534.5)
4. Provides for injunctive relief, as specified, for a
violation of the above statutes. (BPC Section 17535 et
seq. and 17203 et seq.)
Existing law, the Civil Code:
1. Provides, among other things, that using deceptive
representations or designations of geographical origin
in connection with goods or services in a consumer
transaction and misrepresenting the source, sponsorship,
approval, or certification of goods and services are
unlawful as unfair methods of competition and unfair or
deceptive acts or practices.
(Civil Code (CIV) Section 1770)
2. Provides various remedies and penalties, as specified,
for a violation of the above statutes, including
injunctive relief, civil and/or criminal penalties,
actual and punitive damages, and attorney's fees. (CIV
Section 1780 et seq.)
This bill:
1. Makes it an infraction for a provider or vendor of
floral or ornamental products or services to
misrepresent the geographic location of its business by
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either:
A. Listing a local telephone number in any
advertisement or listing, unless the advertisement or
listing identifies the true physical address,
including the city, of the provider's or vendor's
business.
B. Listing a fictitious business name or an assumed
business name in any advertisement or listing if both
of the following are met:
(1) The name of the business misrepresents the
provider's or vendor's geographic location;
(2) The advertisement or listing does not
identify the true physical address, including the
city and state, of the provider's or vendor's
business.
2. Provides that a violation of these provisions is an
infraction, punishable by a fine of up to $250.
3. Specifies that the bill's provisions does not create or
impose a duty or obligation on a person other than a
vendor or provider of floral or ornamental products and
services.
4. Exempts from the bill's provisions:
A. A publisher of a telephone directory or other
publication or a provider of a directory assistance
service publishing or providing information about
another business.
B. An Internet Web site that aggregates and provides
information about other businesses.
C. An owner or publisher of a print advertising
medium providing information about other businesses.
D. An Internet service provider.
E. An Internet service that displays or distributes
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advertisements for other businesses.
5. Defines the following terms for purposes of the
provisions above:
A. "Floral or ornamental products or services" to
mean floral arrangements, cut flowers, bouquets,
potted plants, balloons, floral designs, and related
products and services.
B. "Local telephone number" to mean a specific
telephone number (area code and prefix) assigned for
the purpose of completing local calls between a
calling party or station and any other party or
station within a designated exchange or all of its
designated local calling areas. The term does not
include long distance telephone numbers or any
toll-free telephone numbers listed in a local
telephone directory.
Background
Existing law generally prohibits and provides remedies for
misleading or fraudulent advertising practices. Proponents
of this bill and the four previous bills on this issue have
argued that the flower industry has been targeted by
telemarketers using misleading sales practices. They
contend that out-of-state businesses adopt local sounding
names, and then list a local telephone number in an effort
to mislead consumers into believing that the business is a
local operation. The local telephone number is then
automatically transferred to a distant location, and the
business in fact has no local presence. Proponents have
suggested that while there is nothing wrong with non-local
telemarketing of florist services, the consumer should be
aware that the presumed local small business does not in
fact have a local physical presence.
Consumers may wish to patronize local establishments. For
a variety of reasons, many consumers desire to patronize
local businesses. Many consumers desire to support the
local economy in the area in which they live. Others wish
to have a physical location to visit in the event that
problems arise in the delivery of telephonically ordered
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goods or services. Still others may simply desire to
patronize a small business rather than a much larger
national organization. Listing and advertising local names
and telephone numbers can seriously interfere with these
interests.
Federal Trade Commission (FTC) Consumer Alert . In April
1998, the FTC issued a consumer alert regarding absentee,
"long-distance" florists that mislead consumers into
believing they are local florists but are not:
Flowers are a great way to celebrate a birthday, cheer up
a sick friend, or simply brighten someone's day. Your
local florist is just a phone call away, or so you think.
Some unscrupulous telemarketing firms are posing as
local florists, charging you higher fees and taking
business away from legitimate florists in your town.
Here's how the deception works: A telemarketer takes out
a bogus listing in the white pages of your telephone
directory. The company may use your town's name in its
own to make you believe it's local. Or, name of a
legitimate local florist may be listed with a different
local phone number.
When you call, you're unknowingly forwarded to an
out-of-town telemarketing operation. The telemarketer
takes your order and credit card information for payment,
and forwards your order to an area florist. The
telemarketer pockets a processing fee and usually a
percentage of the sale as well. You don't realize you've
been scammed until you get higher than expected charges
from an out-of-town company on your credit card
statement, or learn that the flowers weren't delivered as
ordered, or were never delivered at all.
Following the FTC's consumer alert, Congress adopted a
concurrent resolution resolving that the FTC should
exercise its broad authority "to investigate businesses
that are engaging in the deceptive advertising practice of
misrepresenting their geographic location in telephone
listings, Internet advertisements, and other advertising
media." (H. Con. Res. 318, 105th Congress, 2d Session,
August 1998)
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FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 6/25/12)
A to Z Wholesale Floral & Supply (Santa Anna)
Baron Paper Company Inc. (Oceanside)
Blooms and Bears (Irvine)
California Association of Nurseries and Garden Centers
California Small Business Association
California State Floral Association
Calla Company (Moss Landing)
Conroy's Flowers (Mission Viejo)
Designs Unique (San Marcos)
Forget Me Not Flowers and Gifts (Walnut Creek)
Fremont Chamber of Commerce
Fremont Flowers (Fremont)
From the Garden Enterprises (Tustin)
Grass Valley Florist (Grass Valley)
Hart Floral (Modesto)
Hayward Chamber of Commerce
Jasmine Creek (El Cajon)
Kings Flowers (Fullerton)
Kitayama Brother Wholesale (Hayward)
Lizio Inc. (Ontario)
Milpitas Chamber of Commerce
Mission Hills (San Diego)
Monarch Florist (Mission Viejo)
National Federation of Small and Independent Business
Overend Designs (Laguna Hills)
Palos Verdes Florist (Rolling Hills Estates)
San Leandro Chamber of Commerce
Simi Valley Chamber of Commerce
Society of American Florists
Sweet Peas Floral Design (Stockton)
Tempel's of Carmel Florist (Carmel)
The Garden Gate Florist (Yuba City)
Walnut Creek Florist (Walnut Creek)
ARGUMENTS IN SUPPORT : According to the author:
At its core, this bill is about combating consumer
deception. Local consumers are misled when orders are
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routed to non-local business locations because fees and
commissions are usually taken out of the order price.
These non-local fees and commissions are not normally
paid when the consumer places a floral order directly
with a truly local florist, as intended. Ironically,
oftentimes the non-local telemarketer who falsely
represents himself as a local florist simply re-routes
the order to a truly local florist for processing. In
these cases, the consumer paid a higher price, and
received less value, while the local florist was
subjected to sharing their profit with an unnecessary and
non-local third party.
The consumer has the right to know and choose when he
wants his floral dollars and sales taxes to leave his
local community and state. This will provide interested
consumers relevant information about the location of a
floral retail business and prevent unscrupulous floral
retailers from parasitical advertising activities on
existing community based local flower shops.
ASSEMBLY FLOOR : 60-11, 5/3/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bradford, Brownley,
Buchanan, Butler, Charles Calderon, Campos, Carter,
Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Eng,
Feuer, Fong, Fuentes, Galgiani, Garrick, Gordon, Gorell,
Halderman, Hayashi, Hill, Huber, Hueso, Huffman,
Jeffries, Knight, Lara, Bonnie Lowenthal, Ma, Mendoza,
Miller, Mitchell, Monning, Nestande, Norby, Olsen, Pan,
Perea, V. Manuel Pérez, Portantino, Silva, Skinner,
Solorio, Swanson, Torres, Wieckowski, Yamada, John A.
Pérez
NOES: Donnelly, Beth Gaines, Gatto, Grove, Hagman, Logue,
Mansoor, Morrell, Nielsen, Valadao, Wagner
NO VOTE RECORDED: Bonilla, Fletcher, Furutani, Hall,
Harkey, Roger Hernández, Jones, Smyth, Williams
JJA:m 6/25/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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