BILL NUMBER: AB 469	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Wagner

                        FEBRUARY 19, 2013

   An act to amend Section 17511.1 of the Business and Professions
Code, relating to advertising.


	LEGISLATIVE COUNSEL'S DIGEST


   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 1.  Section 17511.1 of the Business and Professions Code is
amended to read:
   17511.1.  As used in this article, "telephonic seller" or "seller"
means a person who, on his or her own behalf or through salespersons
or through the use of an automatic dialing-announcing device, as
defined in Section 2871 of the Public Utilities Code, causes a
telephone solicitation or attempted telephone solicitation to occur
which meets the criteria specified in subdivision (a), (b), (c), or
(d) and who is not exempted by subdivision (e), as follows:
   (a) A telephone solicitation or attempted telephone solicitation
wherein the telephonic seller initiates telephonic contact with a
prospective purchaser and represents or implies one or more of the
following:
   (1) That a prospective purchaser who buys one or more items will
also receive additional or other items, whether or not of the same
type as purchased, without further cost. For purposes of this
subdivision, "further cost" does not include actual postage or common
carrier delivery charges, if any.
   (2) That a prospective purchaser will receive a prize or gift, if
the person also encourages the prospective purchaser to do either of
the following:
   (A) Purchase or rent any goods or services.
   (B) Pay any money, including, but not limited to, a delivery or
handling charge.
   (3) That a prospective purchaser is able to obtain any item or
service at a price which the seller states or implies is below the
regular price of the item or service offered. This paragraph shall
not apply to retailers who, within the previous 12 months, have sold
a majority of their goods or services through in-person sales at
retail stores.
   (4) That a prospective purchaser who buys office equipment or
supplies will, because of some unusual event or imminent price
increase, be able to buy these items at prices which are below those
that are usually charged or will be charged for the items.
   (5) That the seller is a person other than the person he or she
is.
   (6) That the items for sale are manufactured or supplied by a
person other than the actual manufacturer or supplier.
   (7) That the seller is offering to sell the prospective purchaser
any gold, silver, or other metals, including coins, diamonds, rubies,
sapphires, or other stones, coal or other minerals, or any interest
in oil, gas, or mineral fields, wells, or exploration sites, or any
other investment opportunity of any type whatsoever.
   (8) That the seller is offering to make a loan, or to arrange or
assist in arranging a loan  or modification of an existing loan,
 or to assist in providing information which may lead to the
obtaining of a loan  or modification of an existing loan  ,
unless no payment of any kind is made until the loan proceeds are
disbursed to the borrower.
   (9) That a prospective purchaser will receive a credit card, as
defined in subdivision (a) of Section 1747.02 of the Civil Code, if
the purchaser pays an up front or preapplication fee for the credit
card to the telephonic seller.
   (b) A solicitation or attempted solicitation which is made by
telephone in response to inquiries generated by unrequested
notifications sent by the seller to persons who have not previously
purchased goods or services from the seller or who have not
previously requested credit from the seller, to a prospective
purchaser wherein the seller represents or implies to the recipient
of the notification that any of the following applies to the
recipient:
   (1) That the recipient has in any manner been specially selected
to receive the notification or the offer contained in the
notification.
   (2) That the recipient will receive a prize or gift if the
recipient calls the seller.
   (3) That if the recipient buys one or more items from the seller,
the recipient will also receive additional or other items, whether or
not of the same type as purchased, without further cost or at a cost
which the seller states or implies is less than the regular price of
such items.
   However, this subdivision does not apply to the solicitation of
sales by a catalog seller who periodically issues and delivers
catalogs to potential purchasers by mail or by other means. This
exception only applies if the catalog includes a written description
or illustration and the sales price of each item of merchandise
offered for sale, includes at least 24 full pages of written material
or illustrations, is distributed in more than one state, and has an
annual circulation of not less than 250,000 customers.
   (c) A solicitation or attempted solicitation which is made by
telephone in response to inquiries generated by advertisements on
behalf of the telephonic seller wherein it is represented or implied
that the seller is offering to sell to the prospective purchaser any
gold, silver, or other metals, including coins, diamonds, rubies,
sapphires, or other stones, coal or other minerals, or any interest
in oil, gas, or mineral fields, wells, or exploration sites, or any
other investment opportunity of any type whatsoever.
   (d) A solicitation or attempted solicitation which is made by
telephone in response to inquiries generated by advertisements on
behalf of the telephonic seller wherein it is represented or implied
that the seller is offering to make a loan or to arrange or assist in
arranging a loan  or modification of an existing loan,  or
to assist in providing information which may lead to the obtaining of
a loan  or modification of an existing loan  , unless no
payment of any kind is made until the loan proceeds are disbursed to
the borrower.
   (e) For purposes of this article, "telephonic seller" or "seller"
does not include any of the following:
   (1) A person offering or selling a security qualified under
Section 25110, 25120, or 25130 of the Corporations Code or exempt
from qualification under Chapter 1 (commencing with Section 25100) of
Part 2 of Division 1 of Title 4 of the Corporations Code. The fact
that a notice claiming an exemption under the Corporate Securities
Law of 1968 is filed with the Department of Corporations does not
create an exemption under this paragraph.
   (2) A person licensed pursuant to Part 1 (commencing with Section
10000) of Division 4, when the solicited transaction is governed by
that law.
   (3) A person licensed pursuant to Chapter 9 (commencing with
Section 7000) of Division 3, when the solicited transaction is
governed by that law.
   (4) A person licensed or certificated pursuant to Part 2
(commencing with Section 680) of Division 1 of the Insurance Code,
including a person licensed pursuant to Chapter 5 (commencing with
Section 1621) thereof, when the solicited transaction is governed by
that law.
   (5) A person offering or selling a franchise registered pursuant
to Section 31110 of the Corporations Code or exempt from registration
under Chapter 1 (commencing with Section 31100) of Part 2 of
Division 5 of Title 4 of the Corporations Code. The fact that a
notice claiming an exemption under the Franchise Investment Law is
filed with the Department of Corporations does not create an
exemption under this paragraph.
   (6) A person soliciting the sale of a seller assisted marketing
plan, as defined in Title 2.7 (commencing with Section 1812.200) of
Part 4 of Division 3 of the Civil Code, who has filed with the
Attorney General the documents required by Section 1812.203 of the
Civil Code.
   (7) A person primarily soliciting the sale of a newspaper of
general circulation, as defined in Article 1 (commencing with Section
6000) of Chapter 1 of Division 7 of Title 1 of the Government Code,
a magazine, or membership in a book or record club whose program
operates in conformity with the requirements of Section 1584.5 of the
Civil Code.
   (8) A person soliciting business from prospective purchasers who
have previously purchased from the business enterprise for which the
person is calling.
   (9) A person soliciting without the intent to complete and who
does not complete the sales presentation during the telephone
solicitation but completes the sales presentation at a later
face-to-face meeting between the solicitor and the prospective
purchaser. However, if a seller, directly following a telephone
solicitation, causes an individual whose primary purpose it is to go
to the prospective purchaser to collect the payment or deliver any
item purchased, this exemption does not apply.
   (10) Any supervised financial institution or parent, subsidiary,
or subsidiary of parent thereof. As used in this paragraph,
"supervised financial institution" means any commercial bank, trust
company, savings and loan association, credit union, industrial loan
company, personal property broker, consumer finance lender,
commercial finance lender, or insurer, provided that the institution
is subject to supervision by an official or agency of this state or
of the United States.
   (11) A person soliciting the sale of a preneed funeral arrangement
regulated by Article 9 (commencing with Section 7735) of Chapter 12
of Division 3.
   (12) A person licensed pursuant to Chapter 19 (commencing with
Section 9600) of Division 3 when acting pursuant to that licensure.
   (13) A person soliciting the sale of services provided by a cable
television system licensed or franchised pursuant to Section 53066 of
the Government Code or any other authority.
   (14) A person or an affiliate of a person whose business is
regulated by the Public Utilities Commission.
   (15) A person soliciting the sale of a commodity pursuant to Part
2 (commencing with Section 58601) of Division 21 of the Food and
Agricultural Code, if the solicitation neither intends to, nor
actually results in, a sale which costs the purchaser in excess of
one hundred dollars ($100).
   (16) An issuer or subsidiary of an issuer that has a security
listed on a national securities exchange or designated as a national
market system security on an interdealer quotation system by the
National Association of Securities Dealers, Inc., if the exchange or
interdealer quotation system has been certified by rule or order of
the Commissioner of Corporations under subdivision (o) of Section
25100 of the Corporations Code. A subsidiary of an issuer that
qualifies for exemption under this paragraph is not itself exempt
unless not less than 60 percent of the voting power of its shares is
owned by the qualifying issuer or issuers.
   (17) A person soliciting exclusively the sale of telephone
answering services to be provided by that person or that person's
employer.
   (18) A person soliciting a transaction regulated by the Commodity
Futures Trading Commission if the person is registered or temporarily
licensed for this activity with the Commodity Futures Trading
Commission under the Commodity Exchange Act (7 U.S.C. Sec. 1 et
seq.), and the registration or license has not expired or been
suspended or revoked.
   (19) A person who sells coins or bullion at a price which is not
more than 25 percent more than the price at which the seller is
concurrently buying the same coins or bullion, if: (A) the seller has
had a retail location in California from which he or she has been
selling coins or bullion to the public in person for at least three
years; (B) the telephonic solicitations are not the person's primary
business and sales made telephonically make up less than 20 percent
of the person's total retail sales; and (C) the person claiming an
exemption pursuant to this subdivision complies with Section 17511.3,
as applicable, and subdivision (p) of Section 17511.4.
   (20) A person licensed pursuant to Chapter 14 (commencing with
Section 1800) of Division 1 of the Financial Code to receive money
for transmittal to foreign countries if the license has not expired
or been suspended or revoked.
   (21) A person licensed as a residential mortgage lender or
servicer pursuant to Division 20 (commencing with Section 50000) of
the Financial Code, when acting under the authority of that license.
   (22) A corporation that meets all of the following conditions:
   (A) It has been exempt from taxation under Section 23701e of the
Revenue and Taxation Code for a minimum of 10 years.
   (B) It has maintained its principal purpose for a minimum of 10
years.
   (C) It has been incorporated in the state for a minimum of 25
years.
   (f) In any civil proceeding alleging a violation of this article,
the burden of proving an exemption or an exception from a definition
is upon the person claiming it, and in any criminal proceeding
alleging a violation of this article, the burden of producing
evidence to support a defense based upon an exemption or an exception
from a definition is upon the person claiming it.
   (g) Compliance with this article does not satisfy nor substitute
for any requirements for license, registration, or regulation
mandated by other laws.
  SEC. 2.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.