BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: AB 1570 Hearing Date: June 13,
2016
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|Author: |Chang |
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|Version: |June 8, 2016 |
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|Urgency: |No |Fiscal: |No |
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|Consultant|Mark Mendoza |
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Subject: Collectibles: sale of autographed memorabilia
SUMMARY:
Requires dealers, as specified, 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.
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) § 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
certificate number from the State Board of Equalization;
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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
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
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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))
This bill:
1) Expands existing consumer protections and requirements
pertaining to the trade in autographed sports collectibles,
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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) Revises the definition of "dealer" to any person who is
principally in the business of selling or offering for sale
collectibles in or from this state.
4) Expands the definition of a "dealer" to include a person
engaged in an online business for the sale of collectibles.
5) Excludes from the definition of a "dealer" a licensed
pawnbroker if the collectible was acquired through a
foreclosure on a collateral loan, provided that the
pawnbroker does not hold himself or herself out as having
knowledge or skill peculiar to collectibles.
6) Excludes from the definition of a "dealer" the personality
who signs the memorabilia.
7) Excludes from the definition of "dealer" an operator of an
online marketplace provided that the online marketplace
provider or operator is not principally in the business of
selling or offering for sale collectibles in or from this
state, exclusively or nonexclusively, or does not hold itself
out as having knowledge or skill peculiar to collectibles.
8) Expands the definition of "description" to include
representations on an Internet webpage or in an email, or a
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representation in an online communication to the public in or
from California.
9) Makes other technical or clarifying amendments.
FISCAL
EFFECT: None. This bill is not keyed "fiscal" by Legislative
Counsel.
COMMENTS:
1. Purpose. The Author is the sponsor of this bill. 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."
2. Background. 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 uncovering
millions in forged sports, entertainment and historical
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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."
3. Arguments in Support. The Consumer Federation of California
asserts that "forged 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."
The Motion Picture Association of America, Inc. underscores
that "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."
The California Police Chiefs Association writes that
"unfortunately no law is currently in place to protect the
consumers from music, movie, historical, or other non-sport
related forgeries, despites 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."
NOTE : Double-referral to the Senate Committee on Judiciary.
SUPPORT AND OPPOSITION:
Support:
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California Police Chiefs Association
Consumer Federation of California
Genuine COA
Mark Hamill, Actor
Motion Picture Association of America, Inc.
The Screen Actors Guild-American Federation of Television and
Radio Artists, AFL-CIO
Opposition:
None on file as of June 7, 2016.
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