BILL ANALYSIS Ó
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THIRD READING
Bill No: SB 272
Author: Corbett (D)
Amended: 5/7/13
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMMITTEE : 10-0, 4/15/13
AYES: Price, Emmerson, Block, Corbett, Galgiani, Hernandez,
Hill, Padilla, Wyland, Yee
SENATE PUBLIC SAFETY COMMITTEE : 7-0, 4/30/13
AYES: Hancock, Anderson, Block, De León, Knight, Liu, Steinberg
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Advertising and solicitations: government and
military endorsements
SOURCE : AMVETS Department of California
California Advocates for Nursing Home Reform
Veterans of Foreign Wars Department of California
Vietnam Veterans of America California State
Council
DIGEST : This bill prohibits implying any military veteran or
military veteran service organization connection, approval or
endorsement of any financial product, goods or services unless
there is a direct connection to that military veteran entity.
ANALYSIS : Existing federal law prohibits the use of any seal,
insignia, trade or brand name that could reasonably be
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interpreted or construed as implying any federal government
connection, approval, or endorsement unless the mailing has a
notification on its face, cover or wrapper that it is not
affiliated with any federal government agency.
Existing state law:
1. Prohibits any person, firm, corporation or association that
is a nongovernmental entity to solicit information, or
solicit the purchase of or payment for a product or service
or to solicit the contribution of funds or membership fees,
by means of a mailing, electronic message or Internet Web
site that contains a seal, insignia, trade or brand name or
any other term or symbol that reasonably could be interpreted
or construed as implying any federal, state or local
government connection, approval or endorsement, unless (a)
the nongovernmental entity has an expressed connection with,
or the approval or endorsement of, a state or local
government entity, if permitted by law; or (b) the
solicitation meets specified requirements.
2. Provides that a violation of these solicitation requirements
is a misdemeanor punishable by up to six months in jail or a
fine of up to $2,500, or both; and provides a private right
of action with damages to any person harmed as a result of a
violation of these solicitation requirements.
3. Defines the terms "conspicuous" disclosure or
"conspicuously."
4. Prohibits specified unfair methods of competition and unfair
or deceptive acts or practices undertaken by any person in a
transaction intended to result, or which results, in the sale
or lease of goods or services to any consumer.
5. Provides that any person who falsely represents
himself/herself as a veteran or ex-serviceman of any war in
which the United States was engaged, in connection with the
soliciting of aid or the sale or attempted sale of any
property, is guilty of a misdemeanor; and provides that any
person who falsely claims, or presents himself/herself, to be
a veteran or member of the U.S. Armed Forces, with the intent
to defraud, is guilty of a misdemeanor.
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6. Provides that any person who solicits or attempts to solicit
or receives money or property of any kind for a charitable,
religious or eleemosynary purpose and who, directly or
indirectly, makes, utters, or delivers, either orally or in
writing, an unqualified statement of fact concerning the
purpose or organization for which the money or property is
solicited or received, or concerning the cost and expense of
solicitation or the manner in which the money or property or
any part thereof is to be used, which statement is in fact
false and was made, uttered, or delivered by that person
either willfully and with knowledge of its falsity or
negligently without due consideration of those facts which by
the use of ordinary care he/she should have known, is guilty
of a misdemeanor, and is punishable by imprisonment in the
county jail for not more than one year, by a fine not
exceeding $5,000, or by both that imprisonment and fine.
This bill:
1. Prohibits the use of a seal, emblem, insignia, trade or
brand name or any other term, symbol or content that could be
interpreted or construed as implying federal, state or local
government, military veteran entity or military or veteran
service connection approval or endorsement of any product or
service. Clarifies that any product or service includes but
is not limited to any financial product, goods or services by
any means including a mailing, electronic message, Internet
Web site, periodical or television commercial disseminated in
this state.
2. Provides that any nongovernmental person, firm, corporation
or association may only use a seal as described above if the
nongovernmental entity has a direct connection with, the
approval of, or endorsement by the federal, state, local
government, military veteran or military service organization
whose seal is being used.
3. Provides that any nongovernmental person, firm, corporation
or association may solicit the purchase of or payment for a
service, or solicit contributions or membership fees through
a mailing, electronic message, Internet Web site, periodical
or television commercial using a seal as described above
according to requirements in current law for a solicitation.
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4. Provides that, for purposes of a television commercial
solicitation, the disclosure requirements under current law
for mailed solicitations apply and the following must be
disclosed at the top of the television screen for the entire
duration of the commercial:
"THIS PRODUCT OR SERVICE HAS NOT BEEN APPROVED OR ENDORSED
BY ANY GOVERNMENT AGENCY, AND THIS OFFER IS NOT BEING MADE
BY AN AGENCY OF THE GOVERNMENT."
5. Specifies that the provisions relating to solicitation
requirements are not applicable to seals, emblems, insignia,
trade or brand name, or any other term, symbol, or content of
the U.S. Department of Veterans Affairs, the Department of
Veterans Affairs, the federal and state military, military
veteran entities, and military or veteran service
organizations.
Background
California is currently home to over two million veterans and
large numbers of elder veterans. According to the Center of
Excellence on Elder Abuse and Neglect, part of the University of
California, Irvine Program in Geriatrics, older people are often
targeted by unscrupulous businesses and individuals because they
generally have more resources available through pensions,
retirement assets, Social Security or property. The Center
notes that businesses use deceptive marketing and sales tactics
to appeal to elders, including the use of patriotic logos and/or
military insignia to appeal to elders' sense of patriotism or
trust in government to sell a product or service.
The U.S. Senate Special Committee on Aging recently heard
testimony about a rise in predatory practices aimed at aging
veterans. Businesses may charge veterans upfront monies for
services that they claim will assist veterans in receiving
pension funds or aid they are due. Advocates state that these
businesses may not have veterans' and their families' interests
in mind and may not even be able to provide accurate information
about navigating the system to receive benefits veterans are
eligible for.
The Federal Trade Commission and federal Consumer Financial
Protection Bureau recently issued a "buyer beware" notification
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to consumers about potentially deceptive mortgage ads targeting
veterans and older Americans. These organizations advised
consumers to be on the lookout for mortgage advertisements with
official-looking seals or logos that imply some kind of
government status or connection to the federal Department of
Veterans Affairs and specifically warned that advertisers may
use military or veteran status as a way to approach them.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/13/13)
California Advocates for Nursing Home Reform (co-source)
AMVETS - Department of California (co-source)
Veterans of Foreign Wars - Department of California (co-source)
Vietnam Veterans of America - California State Council
(co-source)
American Legion - Department of California
California Association of County Veterans Service Officers
California Long-Term Care Ombudsman Association
California State Commanders Veterans Council
Consumer Federation of California
ARGUMENTS IN SUPPORT : The bill's sponsors and veterans
organizations note that it is important to address the
misleading advertising used by some unscrupulous individuals and
businesses who target veterans by claiming to be affiliated with
the military, the Veterans Administration or a veterans service
organization.
MW:k 5/14/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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