AB 469, as introduced, Wagner. Telephonic sellers: loan modifications.
Existing law provides for the regulation of telephonic sellers, and requires that a telephonic seller register with the Department of Justice, as specified. Existing law defines “telephonic seller” to include, among others, a person who represents or implies in a telephonic solicitation, whether or not initiated by the telephonic seller, that he or she is offering to make a loan, or to arrange or assist in arranging a loan or to assist in providing information which may lead to the obtaining of a loan, with a specified exception. Existing law makes it a misdemeanor to solicit prospects on behalf of a telephonic seller who is not registered with the department.
This bill would include in the definition of telephonic sellers a person who represents or implies in a telephonic solicitation, whether initiated by the telephonic seller or made in response to inquiries generated by advertisements on behalf of the telephonic seller, that he or she is offering to arrange or assist in arranging the modification of an existing loan, or to assist in providing information which may lead to the obtaining of a loan modification, as specified. Because this bill would expand the scope of a crime, it would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 17511.1 of the Business and Professions
2Code is amended to read:
As used in this article, “telephonic seller” or “seller”
4means a person who, on his or her own behalf or through
5salespersons or through the use of an automatic dialing-announcing
6device, as defined in Section 2871 of the Public Utilities Code,
7causes a telephone solicitation or attempted telephone solicitation
8to occur which meets the criteria specified in subdivision (a), (b),
9(c), or (d) and who is not exempted by subdivision (e), as follows:
10(a) A telephone solicitation or attempted telephone solicitation
11wherein the telephonic seller initiates telephonic contact with a
12prospective purchaser and represents or implies one or more of
14(1) That a prospective
purchaser who buys one or more items
15will also receive additional or other items, whether or not of the
16same type as purchased, without further cost. For purposes of this
17subdivision, “further cost” does not include actual postage or
18common carrier delivery charges, if any.
19(2) That a prospective purchaser will receive a prize or gift, if
20the person also encourages the prospective purchaser to do either
21of the following:
22(A) Purchase or rent any goods or services.
23(B) Pay any money, including, but not limited to, a delivery or
25(3) That a prospective purchaser is able to obtain any item or
26service at a price which the seller states or implies is below the
27regular price of the item or service offered. This paragraph shall
28not apply to retailers who, within the previous 12 months, have
29sold a majority of their goods or services through in-person sales
30at retail stores.
P3 1(4) That a prospective purchaser who buys office equipment or
2supplies will, because of some unusual event or imminent price
3increase, be able to buy these items at prices which are below those
4that are usually charged or will be charged for the items.
5(5) That the seller is a person other than the person he or she is.
6(6) That the items for sale are manufactured or supplied by a
7person other than the actual manufacturer or supplier.
8(7) That the seller is offering to sell the prospective purchaser
9any gold, silver, or other metals, including coins, diamonds, rubies,
10sapphires, or other stones, coal or other minerals, or any interest
11in oil, gas, or mineral fields, wells, or exploration sites, or any
12other investment opportunity of any type whatsoever.
13(8) That the seller is offering to make a loan, or to arrange or
14assist in arranging a loan or
15to assist in providing information which may lead to the obtaining
16of a loan, unless no payment
17of any kind is made until the loan proceeds are disbursed to the
19(9) That a prospective purchaser will receive a credit card, as
20defined in subdivision (a) of Section 1747.02 of the Civil Code,
21if the purchaser pays an up front or preapplication fee for the credit
22 card to the telephonic seller.
23(b) A solicitation or attempted solicitation which is made by
24telephone in response to inquiries generated by unrequested
25notifications sent by the seller to persons who have not previously
26purchased goods or services from the seller or who have not
27previously requested credit from the seller, to a prospective
28purchaser wherein the seller represents or implies to the recipient
29of the notification that any of the following applies to the recipient:
30(1) That the recipient has in any manner been specially selected
31to receive the notification or the offer contained in the notification.
32(2) That the recipient will receive a prize or gift if the recipient
33calls the seller.
34(3) That if the recipient buys one or more items from
35the recipient will also receive additional or other items, whether
36or not of the same type as purchased, without further cost or at a
37cost which the seller states or implies is less than the regular price
38of such items.
39However, this subdivision does not apply to the solicitation of
40sales by a catalog seller who periodically issues and delivers
P4 1catalogs to potential purchasers by mail or by other means. This
2exception only applies if the catalog includes a written description
3or illustration and the sales price of each item of merchandise
4offered for sale, includes at least 24 full pages of written material
5or illustrations, is distributed in more than one state, and has an
6annual circulation of not less than 250,000 customers.
7(c) A solicitation or attempted solicitation which is made by
8telephone in response to inquiries generated by advertisements on
9behalf of the telephonic seller wherein it is represented or implied
10that the seller is offering to sell to the prospective purchaser any
11gold, silver, or other metals, including coins, diamonds, rubies,
12sapphires, or other stones, coal or other minerals, or any interest
13in oil, gas, or mineral fields, wells, or exploration sites, or any
14other investment opportunity of any type whatsoever.
15(d) A solicitation or attempted solicitation which is made by
16telephone in response to inquiries generated by advertisements on
17behalf of the telephonic seller wherein it is represented or implied
18that the seller is offering to make a loan or to arrange or assist in
19arranging a loan or to assist
20in providing information which may lead to the obtaining of a loan
21, unless no payment of any kind
22is made until the loan proceeds are disbursed to the borrower.
23(e) For purposes of this article, “telephonic seller” or “seller”
24does not include any of the following:
25(1) A person offering or selling a security qualified under
26Section 25110, 25120, or 25130 of the Corporations Code or
27exempt from qualification under Chapter 1 (commencing with
28Section 25100) of Part 2 of Division 1 of Title 4 of the
29Corporations Code. The fact that a notice claiming an exemption
30under the Corporate Securities Law of 1968 is filed with the
31Department of Corporations does not create an exemption under
33(2) A person licensed pursuant to Part 1 (commencing with
34Section 10000) of Division 4, when the solicited transaction is
35governed by that law.
36(3) A person licensed pursuant to Chapter 9 (commencing with
37Section 7000) of Division 3, when the solicited transaction is
38governed by that law.
39(4) A person licensed or certificated pursuant to Part 2
40(commencing with Section 680) of Division 1 of the Insurance
P5 1Code, including a person licensed pursuant to Chapter 5
2(commencing with Section 1621) thereof, when the solicited
3transaction is governed by that law.
4(5) A person offering or selling a franchise registered pursuant
5to Section 31110 of the Corporations Code or exempt from
6registration under Chapter 1 (commencing with Section 31100)
7of Part 2 of Division 5 of Title 4 of the Corporations Code. The
8fact that a notice claiming an exemption under the Franchise
9Investment Law is filed with the Department of Corporations does
10not create an exemption under this paragraph.
11(6) A person soliciting the sale of a seller assisted marketing
12plan, as defined in Title 2.7 (commencing with Section 1812.200)
13of Part 4 of Division 3 of the Civil Code, who has filed with the
14Attorney General the documents required by Section 1812.203 of
15the Civil Code.
16(7) A person primarily soliciting the sale of a newspaper of
17general circulation, as defined in Article 1 (commencing with
18Section 6000) of Chapter 1 of Division 7 of Title 1 of the
19Government Code, a magazine, or membership in a book or record
20club whose program operates in conformity with the requirements
21of Section 1584.5 of the Civil Code.
22(8) A person soliciting business from prospective purchasers
23who have previously purchased from the business enterprise for
24which the person is calling.
25(9) A person soliciting without the intent to complete and who
26does not complete the sales presentation during the telephone
27solicitation but completes the sales presentation at a later
28face-to-face meeting between the solicitor and the prospective
29purchaser. However, if a seller, directly following a telephone
30solicitation, causes an individual whose primary purpose it is to
31go to the prospective purchaser to collect the payment or deliver
32any item purchased, this exemption does not apply.
33(10) Any supervised financial institution or parent, subsidiary,
34or subsidiary of parent thereof. As used in this paragraph,
35“supervised financial institution” means any commercial bank,
36trust company, savings and loan association, credit union, industrial
37loan company, personal property broker, consumer finance lender,
38commercial finance lender, or insurer, provided that the institution
39is subject to supervision by an official or agency of this state or of
40the United States.
P6 1(11) A person soliciting the sale of a preneed funeral
2arrangement regulated by Article 9 (commencing with Section
37735) of Chapter 12 of Division 3.
4(12) A person licensed pursuant to Chapter 19 (commencing
5with Section 9600) of Division 3 when acting pursuant to that
7(13) A person soliciting the sale of services provided by a cable
8television system licensed or franchised pursuant to Section 53066
9of the Government Code or any other authority.
10(14) A person or an affiliate of a person whose business is
11regulated by the Public Utilities Commission.
12(15) A person soliciting the sale of a commodity pursuant to
13Part 2 (commencing with Section 58601) of Division 21 of the
14Food and Agricultural Code, if the solicitation neither intends to,
15nor actually results in, a sale which costs the purchaser in excess
16of one hundred dollars ($100).
17(16) An issuer or subsidiary of an issuer that has a security listed
18on a national securities exchange or designated as a national market
19system security on an interdealer quotation system by the National
20Association of Securities Dealers, Inc., if the exchange or
21interdealer quotation system has been certified by rule or order of
22the Commissioner of Corporations under subdivision (o) of Section
2325100 of the Corporations Code. A subsidiary of an issuer that
24qualifies for exemption under this paragraph is not itself exempt
25unless not less than 60 percent of the voting power of its shares is
26owned by the qualifying issuer or issuers.
27(17) A person soliciting exclusively the sale of telephone
28answering services to be provided by that person or that person’s
30(18) A person soliciting a transaction regulated by the
31Commodity Futures Trading Commission if the person is registered
32or temporarily licensed for this activity with the Commodity
33Futures Trading Commission under the Commodity Exchange Act
34(7 U.S.C. Sec. 1 et seq.), and the registration or license has not
35expired or been suspended or revoked.
36(19) A person who sells coins or bullion at a price which is not
37more than 25 percent more than the price at which the seller is
38concurrently buying the same coins or bullion, if: (A) the seller
39has had a retail location in California from which he or she has
40been selling coins or bullion to the public in person for at least
P7 1three years; (B) the telephonic solicitations are not the person’s
2primary business and sales made telephonically make up less than
320 percent of the person’s total retail sales; and (C) the person
4claiming an exemption pursuant to this subdivision complies with
5Section 17511.3, as applicable, and subdivision (p) of Section
7(20) A person licensed pursuant to Chapter 14 (commencing
8with Section 1800) of Division 1 of the Financial Code to receive
9money for transmittal to foreign countries if the license has not
10expired or been suspended or revoked.
11(21) A person licensed as a residential mortgage lender or
12servicer pursuant to Division 20 (commencing with Section 50000)
13of the Financial Code, when acting under the authority of that
15(22) A corporation that meets all of the following conditions:
16(A) It has been exempt from taxation under Section 23701e of
17the Revenue and Taxation Code for a minimum of 10 years.
18(B) It has maintained its principal purpose for a minimum of
20(C) It has been incorporated in the state for a minimum of 25
22(f) In any civil proceeding alleging a violation of this article,
23the burden of proving an exemption or an exception from a
24definition is upon the person claiming it, and in any criminal
25proceeding alleging a violation of this article, the burden of
26producing evidence to support a defense based upon an exemption
27or an exception from a definition is upon the person claiming it.
28(g) Compliance with this article does not satisfy nor substitute
29for any requirements for license, registration, or regulation
30mandated by other laws.
No reimbursement is required by this act pursuant to
32Section 6 of Article XIII B of the California Constitution because
33the only costs that may be incurred by a local agency or school
34district will be incurred because this act creates a new crime or
35infraction, eliminates a crime or infraction, or changes the penalty
36for a crime or infraction, within the meaning of Section 17556 of
37the Government Code, or changes the definition of a crime within
P8 1the meaning of Section 6 of Article XIII B of the California