BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2076|
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THIRD READING
Bill No: AB 2076
Author: Salas (D)
Amended: 6/23/10 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEV. COMMITTEE : 5-1,
6/21/10
AYES: Negrete McLeod, Calderon, Correa, Florez, Yee
NOES: Aanestad
NO VOTE RECORDED: Wyland, Oropeza, Walters
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 71-5, 5/13/10 - See last page for vote
SUBJECT : Advertising: business location
representations: floral and
ornamental products and services
SOURCE : California State Floral Association
DIGEST : This bill makes it unlawful for a provider or
vendor of floral or ornamental products or services, as
defined, to misrepresent the geographic location of its
business, as specified.
ANALYSIS :
Existing law, the Business and Professions Code:
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1. Regulates advertising, generally, and makes it unlawful
for any person, firm, corporation or association, or any
employee to make any statement in any advertising which
is untrue or misleading, and which is known or, in the
exercise of reasonable care, should be known to be
untrue or misleading.
2. Provides that unfair competition includes any unlawful,
unfair or fraudulent business act or practice and
unfair, deceptive, untrue or misleading advertising and
other prohibited acts, as specified.
Existing law, the Civil Code, provides, among other things,
that using deceptive representations or designations of
geographical origin in connection with goods or services in
a consumer transaction and misrepresenting the source,
sponsorship, approval, or certification of goods and
services are unlawful as unfair methods of competition and
unfair or deceptive acts or practices.
This bill:
1. Makes it unlawful for a provider or vendor of floral or
ornamental products or services to misrepresent the
geographic location of its business by either:
A. Listing a local telephone number in any
advertisement or listing unless the advertisement or
listing identifies the true physical address,
including the city and state of the provider's or
vendor's business.
B. Listing a fictitious business name or an assumed
business name in any advertisement or listing if both
of the following are met:
(1) The name of the business misrepresents the
provider's or vendor's geographic location.
(2) The advertisement or listing does not
identify the true physical address, including the
city and state, of the provider's or vendor's
business.
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2. States that this bill does not create or impose any duty
or obligation on a person other than a vendor or
provider, as specified.
3. Defines the following terms for purposes of the
provisions above:
A. "Floral or ornamental products or services" to
mean floral arrangements, cut flowers, bouquets,
potted plants, balloons, floral designs, and related
products and services.
B. "Local telephone number" to mean a specific
telephone number (area code and prefix) assigned for
the purpose of completing local calls between a
calling party or station and any other party or
station within a designated exchange or all of its
designated local calling areas. The term would not
include long distance telephone numbers or 800, 888,
or 900 exchange telephone numbers listed in a local
telephone directory.
Background
Federal Trade Commission (FTC) Consumer Alert . In April
1998, the FTC issued a consumer alert regarding absentee,
"long-distance" florists that mislead consumers into
believing they are local florists but are not:
Flowers are a great way to celebrate a birthday, cheer up
a sick friend, or simply brighten someone's day. Your
local florist is just a phone call away, or so you think.
Some unscrupulous telemarketing firms are posing as
local florists, charging you higher fees and taking
business away from legitimate florists in your town.
Here's how the deception works: A telemarketer takes out
a bogus listing in the white pages of your telephone
directory. The company may use your town's name in its
own to make you believe it's local. Or, name of a
legitimate local florist may be listed with a different
local phone number.
When you call, you're unknowingly forwarded to an
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out-of-town telemarketing operation. The telemarketer
takes your order and credit card information for payment,
and forwards your order to an area florist. The
telemarketer pockets a processing fee and usually a
percentage of the sale as well. You don't realize you've
been scammed until you get higher than expected charges
from an out-of-town company on your credit card
statement, or learn that the flowers weren't delivered as
ordered, or were never delivered at all.
Following the FTC's consumer alert, Congress adopted a
concurrent resolution resolving that the FTC should
exercise its broad authority "to investigate businesses
that are engaging in the deceptive advertising practice of
misrepresenting their geographic location in telephone
listings, Internet advertisements, and other advertising
media" (H. Con. Res. 318, 105th Congress, 2d Session,
August 1998).
23 other states have enacted similar laws . The bill's
sponsor writes that 23 states have enacted legislation
similar to this measure to prohibit deceptive telephone
listings by absentee florists, including Arizona,
Connecticut, Delaware, Florida, Illinois, Indiana, Iowa,
Kansas, Kentucky, Maine, Michigan, New Hampshire, New
Jersey, Ohio, Oklahoma, Pennsylvania, South Carolina, South
Dakota, Tennessee, Texas, Virginia, and Washington.
Prior Legislation
This bill is the fourth bill introduced in the last 11
years on this same issue. Each of the bills were
substantially the same. Each bill was vetoed by the
Governor. In vetoing the latest bill, AB 1282 (Salas) in
2007, the Governor stated in part, "In today's global
economy, it is unreasonable to limit out-of-area businesses
from using local names and telephone numbers. In virtually
every aspect of the economy, consumers are accustomed to
purchasing products from around the world via many
methods." It is unclear how the sponsor and author will
address the Governor's veto message.
AB 1282 (Salas), 2007-08 Session, a nearly identical
measure, which was vetoed by Governor Schwarzenegger.
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AB 1074 (Nakano), 2001-02 Session, also a substantially
similar bill, was vetoed by Governor Davis, who noted the
same concerns as Governor Schwarzenegger did in his veto of
AB 1282 (Salas).
AB 1375 (House), 1999-2000 Session, a similar measure, was
also vetoed by Governor Davis.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/4/10)
California State Floral Association (source)
ARGUMENTS IN SUPPORT : This bill is sponsored by the
California State Floral Association in order to prohibit
floral vendors from misrepresenting their business location
by adopting fictitious local names and telephone numbers
for advertising purposes or by omitting the true physical
address of their business in telephone listings. The
sponsor states that the bill seeks to increase consumer
awareness, support economic activity in local communities,
improve sales tax collection and help encourage job
retention and growth within California's floral industry.
The author states the following need for the bill:
"California floral shops are often locally owned
community based businesses that rely on localized
marketing to attract business. They often use local
names consistent with the communities they serve such as
'Lodi Florists.' Flower buyers are unique as well. They
often call remotely and order and establish an amount
they are willing to spend or they order a set item (i.e.
'Please give me a bouquet for $50' or 'I would like a
dozen roses') purchased sight unseen. The local flower
shop has advertised and promoted and their business is
relying on trust and quality because often the purchase
is sight unseen.
"Out of state call centers are taking advantage of this
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business model to the detriment of California consumers
and local floral shops by advertising as a "local" shop,
often using similar names as the locally established shop
and piggybacking on their advertising and community
relationships (i.e. A New Jersey based company
advertising as "Lodi Floral and Gift") with no local
presence except an ad in the phone book and an internet
website with a local phone number. Originally, this
phenomena was occurring in telephone advertising only but
has now spread to the internet. The result is consumers
believe they are buying from their local shop and
receiving $50 worth of flowers, when they are actually
purchasing from a New Jersey based call center for $50,
the call center takes a cut, the wire service takes a cut
and the consumer gets $30 worth of flowers.
"To add insult to injury, often dissatisfied customers
come into the local community based shop and complain
about the poor quality or skimpy order because they
thought they purchased from 'Lodi Florists.' The local
florist has to handle an unsatisfied customer and not
even get the benefit of the sale. This bill establishes
a simple compliance requirement that any floral retailer
that uses a local phone number provide address in the
advertisement."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Bass, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De
La Torre, De Leon, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Galgiani, Garrick,
Gilmore, Hall, Harkey, Hayashi, Hernandez, Hill, Huber,
Huffman, Jones, Knight, Lieu, Logue, Bonnie Lowenthal,
Ma, Mendoza, Miller, Monning, Nava, Nestande, Niello,
Nielsen, V. Manuel Perez, Portantino, Ruskin, Salas,
Saldana, Silva, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, John
A. Perez
NOES: Anderson, DeVore, Gaines, Jeffries, Smyth
NO VOTE RECORDED: Hagman, Norby, Skinner, Vacancy
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JJA:mw 8/4/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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