BILL ANALYSIS Ó
AB 1570
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Date of Hearing: May 3, 2016
ASSEMBLY COMMITTEE ON PRIVACY AND CONSUMER PROTECTION
Ed Chau, Chair
AB 1570
(Chang) - As Amended April 25, 2016
SUBJECT: Collectibles: sale of autographed memorabilia
SUMMARY: Requires dealers who advertise and sell any type of
autographed collectible to provide a certificate of authenticity
to the purchaser, and generally expands a variety of consumer
protections that currently only apply to autographed sports
memorabilia to cover all such collectibles. Specifically, this
bill:
1)Generally expands existing consumer protections and
requirements pertaining to the trade in autographed sports
collectibles, including specified requirements for a
certificate of authenticity and dealer disclosures, by
deleting the reference to "sports", thereby making the
existing provisions apply to all autographed collectibles.
2)Expands the definition of a "collectible" to mean any
autographed item sold or offered for sale in or from this
state by a dealer to a consumer for five dollars ($5) or more.
3)Expands the definition of a "dealer" to include a person
engaged in an online business for the sale of collectibles.
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4)Excludes from the definition of a "dealer" a licensed
pawnbroker if the collectible was acquired through a
foreclosure on a collateral loan, the personality who signs
the memorabilia, and a provider of an online marketplace
platform.
5)Expands the definition of "description" to include
representations on an Internet webpage or in an email, or a
representation in an online communication to the public in or
from California.
6)Makes other technical or clarifying amendments.
EXISTING LAW:
1)Regulates the sale or offer to sell by a dealer to a consumer
of a sports collectible in or from this state. (Civil Code
(CC) Section 1739.7)
2)Requires a dealer, in selling or offering to sell to a
consumer an autographed sports collectible in or from this
state, to furnish a certificate of authenticity to the
consumer at the time of sale. The certificate of authenticity
must be in writing, be signed by the dealer or his or her
authorized agent, specify the date of sale, be in at least
10-point boldface type and contain the dealer's true legal
name and street address. The dealer must retain a copy of the
certificate of authenticity for at least seven years. (CC
1739.7(b))
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3)Requires each certificate of authenticity to do all of the
following:
a) Describe the collectible and specify the name of the
sports personality who autographed it;
b) Either specify the purchase price and date of sale or be
accompanied by a separate invoice setting forth that
information;
c) Contain an express warranty, which shall be conclusively
presumed to be part of the bargain, of the authenticity of
the collectible, as specified;
d) Specify whether the collectible is offered as one of a
limited edition and, if so, specify how the collectible and
edition are numbered; and the size of the edition and the
size of any prior or anticipated future edition, as
specified;
e) Indicate whether the dealer is surety bonded or is
otherwise insured to protect the consumer against errors
and omissions of the dealer and, if bonded or insured,
provide proof thereof;
f) Indicate the last four digits of the dealer's resale
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certificate number from the State Board of Equalization;
g) Indicate whether the item was autographed in the
presence of the dealer and specify the date and location
of, and the name of a witness to, the autograph signing;
h) Indicate whether the item was obtained or purchased from
a third party, and the name and address of this third
party, if applicable; and
i) Include an identifying serial number that corresponds to
an identifying number printed on the collectible item, if
any, which shall also be printed on the sales receipt. (CC
1739.7(b))
1)Prohibits a dealer from representing an item as a collectible
if it was not autographed by the sports personality in his or
her own hand. (CC 1739.7(c))
2)Prohibits a dealer from displaying or offering for sale a
collectible in this state unless he or she displays a
conspicuous sign at the location where the collectible is
offered for sale and in close proximity to the collectible
merchandise, as specified. (CC 1739.7(d))
3)Requires any dealer engaged in a mail-order or telephone-order
business for the sale of collectibles in or from this state to
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make specified disclosures in any written, radio or televised
advertisement. (CC 1739.7(e))
4)Prohibits a dealer from displaying or offering for sale a
collectible in this state at any trade show or similar event
primarily featuring sales of collectibles or other sports
memorabilia that offers onsite admission ticket sales unless,
at each onsite location where admission tickets are sold,
there is prominently displayed a specimen example of a
certificate of authenticity. (CC 1739.7(f))
5)Entitles any consumer injured by the failure of a dealer to
provide a valid certificate to recover, in addition to actual
damages, a civil penalty in an amount equal to 10 times actual
damages, plus court costs, reasonable attorney's fees,
interest, and expert witness fees, if applicable, plus
additional damages based on the egregiousness of the dealer's
conduct. (CC 1739.7(g))
6)Prohibits a person from representing himself or herself as a
dealer in this state unless he or she possesses a valid resale
certificate number from the State Board of Equalization. (CC
1739.7(h))
7)Requires a promoter arranging or organizing a trade show
featuring collectibles and autograph signings to notify in
writing any dealer who has agreed to purchase or rent space in
this trade show as to their legal responsibilities, as
specified. ((CC 1739.7(j))
FISCAL EFFECT: None. This bill has been keyed nonfiscal by the
Legislative Counsel.
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COMMENTS:
1)Purpose of this bill . This bill is intended to protect the
purchasers and collectors of all types of autographed
memorabilia by expanding the existing protections for sports
memorabilia, including consumer disclosures and remedies, to
all types of collectibles. This bill is author-sponsored.
2)Author' statement . According to the author, "Current law has
strong consumer protections in place for signed sports
memorabilia, however forged collectibles are just as prevalent
outside of the sports market. No law is currently in place to
protect consumers from music, movie, historical, or other
non-sport related forgeries. Professional authenticators
evaluate hundreds of thousands of autographs annually
worldwide, and often determine the signatures to be forged.
According to industry experts, the rejection rate can reach
over 50% of submitted items for the more prominent names,
including Neil Armstrong, Michael Jackson, and others.
"Fake autographs can be difficult for anyone to identify without
professional validation, let alone children who are often the
victims of fake signed memorabilia. Because it is so easy to
fabricate a signature, authentication requirements are needed
across all genres of collectibles to ensure consumers have
ample protections - including civil recourse if they are sold
fake items."
3)The market for forged collectibles . According to the author,
there is widespread fraud in the market for autographed
collectibles "Experts estimate that?94 percent of all
autographed Beatles memorabilia is forged, as are 76 percent
of Marilyn Monroe and Elvis Presley collectibles. In the last
twenty years, the FBI instituted two major investigations
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uncovering millions in forged sports, entertainment and
historical autographed memorabilia - both cases involved
operations in California. During the most recent
investigation, the FBI estimated forged memorabilia 'comprises
between $500,000,000 and $900,000,000' of the overall market.
"As recently as 2015, the widow of The Jimi Hendrix Experience
drummer Mitch Mitchell warned that many items sold online that
purported to have been signed by Jimi Hendrix were really
fake. While Star Wars icon Mark Hamill took to Twitter to
tell fans which of their signed collectibles were forged and
which were genuine."
4)Existing protections for sports collectibles . Under existing
law, dealers in signed sports memorabilia must furnish a
certificate of authenticity to the consumer at time of sale.
The certificate provides the consumer with information about
the collectible and the dealer, as well as an express
warranty. Dealers must also display at the sale site and in
advertisements a disclosure regarding the rights of the
consumer. A consumer injured by an omitted or false
certificate may seek actual damages, a civil penalty in an
amount equal to 10 times actual damages, plus court costs,
reasonable attorney's fees, interest, expert witness fees, and
additional damages for egregious conduct, incurred by the
consumer in the action. Dealers must have a valid resale
certificate number from the State Board of Equalization and be
surety bonded or insured.
This bill would expand the same protections to all forms of
signed collectibles, and also clarify that these protections
apply to collectibles offered for sale online.
5)Arguments in support . According to the California Police
Chiefs Association, "Current law helps reduce forged
autographs in the sports memorabilia market by requiring
dealers to demonstrate authenticity. Any autographed sports
item (including photos, books, cards, clothing and equipment,
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etc.) sold by a dealer must be accompanied by a certificate of
authenticity, and the dealer must display signage informing
the public of authentication laws."
"Unfortunately, no law is currently in place to protect the
consumers from music, movie, historical, or other non-sport
related forgeries, despite these forged collectibles being
just as prevalent. AB 1570 closes this loophole and will
reduce the number of victims of forgery by strengthening the
safeguards for non-sports memorabilia enthusiasts."
According to actor Mark Hamill, "Standardized authentication
requirements are needed across all genres of collectibles -
not just sports related - to ensure all memorabilia sold is
authentic. AB 1570 strengthens the safeguards for non-sports
memorabilia enthusiasts by affording them the same civil
recourse granted to purchasers of sports memorabilia.
Anything we can do to ensure forged autographs are removed
from the market will increase consumer confidence in this
particular industry."
The Motion Picture Association of America (MPAA) states, "This
bill is consistent with MPAA and member company efforts to
protect motion pictures and television from theft and to
ensure the integrity of these high value productions for the
benefit of viewers and consumers."
Consumer Federation of California writes, "[f]orged autographs
are estimated to account for $100 million of the approximately
$1 billion per year autographed memorabilia market in the
United States. Signatures are comparatively easy to fake and
consumers are often defrauded by bad actors. Current law
already protects consumers in the case of sports memorabilia;
the autographs of famous non-athlete historical figures are no
different and consumers deserve the same protections for those
purchases."
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REGISTERED SUPPORT / OPPOSITION:
Support
California Police Chiefs Association
Consumer Federation of California
Genuine Certificate of Authenticity
Mark Hamill, Actor
Motion Picture Association of America, Inc.
Screen Actors Guild-American Federation of Television and Radio
Artists, AFL-CIO
Opposition
None on file.
Analysis Prepared by:Hank Dempsey / P. & C.P. / (916) 319-2200
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