AB1570: A Game Changer?
by Maxine Carter-Lome
On September 9, 2016, California Governor Jerry Brown signed AB1570 Collectibles Sale of Autographed Memorabilia into law. An expansion of an existing consumer protection law (CA Civil Code §1739.7) that applied just to sports memorabilia, AB1570 requires individuals who are “principally in the business of selling or offering for sale collectibles” to provide consumers with a detailed certificate of authenticity (COA) for signed items (defined as bearing the actual signature of a personality signed by that individual’s own hand) sold for $5 or more. The law applies both to sales entirely within California, as well as those made by California dealers to persons residing outside of the state.
AB1570, which went into effect January 1, 2017, was instituted to crack down on fraudulent autographed material; however, the realities of the marketplace for autographed memorabilia may create more challenges to the law than the law looks to solve. Opponents to the law point out several of its ‘gray’ areas. For example, under AB1570 when you sell or consign a signed painting that you inherited to a dealer or an item from your collection that you purchased years ago, you are responsible for providing a guarantee of authenticity, which the dealer will need and be required to provide when the item is resold. Failure to do so could result in a civil penalty of ten times actual damages. Unfortunately, the legislators never took into account that buyers of autographed materials eventually become sellers of autographed materials.
So what exactly constitutes a COA?
The law here is pretty specific. It cannot be a generic pre-printed boilerplate paperwork, but must: 1) Describe the collectible and specify the name of the personality who autographed it; 2) Either specify the purchase price and date of sale or be accompanied by a separate invoice setting forth the information; 3) Contain an express warranty, which shall be conclusively presumed to be part of the bargain, of the authenticity of the collectible … and such additional information as the name and address of a third party if item was purchased through one, and the name of any witness to the autograph signing.
These requirements place a tremendous amount of accountability on not only dealers but collectors and individuals who sell or consign signed items to dealers. As dealers and savvy collectors have known for years, a COA can be more of an opinion than a guarantee, which still puts the onus on the buyer to do their homework, proceed with caution, and work with professional and reputable dealers.
The bill has antique shop owners and dealers in the state of California and who do business with buyers in California, uneasy-especially with a $5 price point as the starting price for a required COA. It also has art dealers and booksellers concerned about the ambiguity of the law. For example, artwork often contains the original signature of the artist, which could place it under the scope of the law. Booksellers who host book signings for authors could be required to provide a COA to every customer who bought and had their book signed by the author. Although the bill’s author, former Assemblywoman Ling Ling Chang, has stated publicly that the law was not meant to affect the autographed book and art markets, opponents are unsure that the California courts will make that distinction should the issue be challenged.
The legislation was meant to curtail autographed memorabilia fraud-first in the area of sports memorabilia, where it is reported that fraud costs consumers more than $500 million annually, and now expanded to include all autographed items. This could be a potential game-changer as other states watch and see how this new law plays out.
This issue on sports memorabilia shows us how much is at stake for the casual and serious collector and fans, alike. High-end collectors such as Marshall Fogel, who shares some of his favorite World Series items from his collection on page 30, can invest significant sums when acquiring special items for their collection. Fans looking to own something signed by their sports hero are also susceptible, tending to buy with their heart rather than their head. This new law looks to protect them both, but the question remains: how much of a guarantee is a COA, especially on merchandise purchased long before the law came into effect and for which there is no bill of sale or record of a transaction.
I welcome your thoughts on this (email@example.com), which I am happy to share in an upcoming issue. Let the games begin!
AB1570: A Game Changer?