Louisiana Auctioneers Association Opposes Senate Bill 642
Published May 23rd, 2006
The Louisiana Auctioneers Association has announced its opposition to Senate Bill 642. It attempts to change how Louisiana law defines an auction. It seeks to confine the auction licensing law to the traditional public auction. The bill also seeks to exempt individuals and businesses that engage in auctions over the Internet.
For the protection of citizens of Louisiana, the Louisiana Code currently imposes licensing requirements for auctioneers and auction businesses. The law currently requires an auctioneer license for individuals who engage in selling items by competitive bids for a third party in return for a fee or commission. The Code also requires an auction business license for businesses that arrange, manage, sponsor, or advertise auctions for a third party.
The Louisiana Auctioneers Association is concerned about this legislation because it will result in the exemption of several individuals and businesses from the auction licensing requirements. There seems to be some confusion and misinformation regarding the application of the auction license law to individuals and businesses that buy and sell goods at Internet auction websites. An individual selling his or her own goods on-line through an Internet auction website is not required to have an auctioneer or auction business license. However, an individual or business that takes goods on consignment from a third party for sale at an Internet auction website for a fee is required to have an auction business license. The license law only applies to individuals or businesses that sell property owned by a third party for a fee.
The auction licensing law establishes minimum standards for auctioneers and auction businesses to ensure a certain amount of knowledge, skill, competence, and training. These standards are necessary for sales conducted over the Internet. Internet auction fraud is a significant problem across the United States and in Louisiana. The National White Collar Crime Center and Federal Bureau of Investigation monitor Internet crime and report on it annually in their joint IC3 reports. According the to “IC3 2005 Internet Crime Report,” there were 231,493 complaints made between January 1, 2005 and December 31, 2005. The IC3 Report stated that the “(d)ollar loss of referred complaints was at an all time high in 2005″ with losses of approximately $183.12 million. In describing the complaints, IC3 reported: “Internet auction fraud was by far the most reported offense, comprising 62.7% of the referred fraud complaints.” The second largest category reported by IC3 is “the non-delivery of merchandise and/or payment” which only represented 15.7% of the complaints. Credit and debit card fraud consisted of only 6.8% of the complaints.
IC3 received a total of 1,771 complaints from citizens and businesses in the State of Louisiana in 2005. Internet auction fraud accounted for 59.8% of the complaints in Louisiana. The total amount lost by Louisiana citizens as a result of Internet auction fraud is not shown in the report. Louisiana’s IC3 Report does, however, show that 96.6% of the individuals who filed a complaint with IC3 for Internet auction fraud reported a loss. The median loss per individual who filed a complaint with IC3 for Internet auction fraud was $524.
If the Commerce Committee rejects Senate Bill 642 and maintains the current law, the Louisiana Auctioneers Licensing Board will be able to enforce the current provisions to protect Louisiana’s citizens and economy. The Louisiana Auctioneers Association will oppose Senate Bill 642 and requests others to join them in the fight to protect consumers.
The Louisiana Auctioneers Association exists to promote the auction method of marketing through professional and ethical auctioneering practices in the Louisiana region. Membership is open to auctioneers, auction companies, and associates with an interest in this age-old method of marketing. For more information, visit the LAA web site at www.louisianaauctioneers.org.
