EcommerceBytes-NewsFlash, Number 1484 - February 28, 2007     1 of 4

New Hampshire May Exempt eBay Consignment Sellers from Regulation

By Kathy Greer

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When New Hampshire representative John Hunt of Rindge, NH submitted legislation that would exempt residents selling at online auctions such as eBay from being required to obtain a New Hampshire auctioneer's license, he says he had no idea what opposition he might face from existing licensed auctioneers.

On Thursday, February 22, 2007, he discovered exactly how strongly they feel about the matter.

Stacks of opposing letters in hand, at least twenty-five New Hampshire auctioneers along with a lobbyist, showed up at the Legislative Office Building in the state's capital of Concord, NH, to voice their opposition to HB 544, a bill that proposes to redefine the definition of the word "auctioneer" in New Hampshire statute.

The proposed new law redefines the word as follows: "Auctioneer" means a person who engages in this state in the business of selling for another real, personal or mixed property by auction; except that auctioneer shall not include a person who sells such property for another through the Internet.

This proposed law if adopted, in essence would completely exempt internet auctions from the laws regulating auctions in New Hampshire. Such is not the current status concerning online auctions. New Hampshire Sr. Asst. Attorney General Wynn Arnold has repeatedly affirmed that current New Hampshire auction laws govern those selling for others at online auction.

The key words emphasized under existing law 311-B by the AG's office are: selling at auction for others for a fee or commission.

Everyone at the hearing on February 22nd agreed there was no problem with grandma selling her own stuff, or your neighbor doing you a favor and selling a couple of things for you at no charge. It's when fees are charged and control of merchandise and money takes place that the real licensing problems arise in New Hampshire.

Charles Clougherty, Chairman of the NH Board of Auctioneers, the state licensing authority, spoke in opposition to HB 544. He said, "Thousands of lawful auctions occur in N.H. with sales estimated in the $100's MM annually with virtually no problems. This makes the auctioneering profession a serious and significant business in the state."

For that reason, he added, the state requires auctioneers to be licensed and bonded for the protection of the public. He mentioned eBay drop-off centers springing up around the state and said, "unlicensed individuals who choose to auction online do not answer to anyone, have no accountability for their actions and would be free to operate without any oversight whatsoever," if HB 544 were enacted.

He said the public would be, if the bill were passed, "open to the possibility, in fact the probability of serious error, improper conduct, irresponsible financial dealings and failure to protect the consignor's goods."

Several state representatives of the ED & A committee, in front of which the bill was being debated, mentioned enforcement and fines in relation to existing law. They appeared dismayed when they learned the existing Board of Auctioneers has no subpoena powers, no system of fines, and no punishment to be levied other than to revoke an auctioneer's license.

Rep. Pilotte asked, "What guarantees are there now?"

Auction Board Chairman Clougherty explained that existing New Hampshire auctioneers are required to carry a $10,000 bond, against which a levy could be placed if misconduct had occurred.

Several representatives stated they felt this amount was archaic and needed to be increased, particularly after auctioneer Richard Levine of Keene, NH spoke. Levine said he strictly conducts online auctions and obtained his auctioneer's license three years ago after "the Secretary of State told me I had to have a license to sell online."

He spoke in opposition to HB 544, saying he believed licensing protected the public. He mentioned the recent sale of a banjo he'd conducted online for a client. It had been appraised for $2500 and sold at online auction for $35,000. "At any one time, I could have $100,000 of other people's money in my checking account," he said, adding that his client was most pleased when he gave her a check for $31,000.

Levine said "there are hundreds of people violating the existing law (in New Hampshire); storefronts opening up all over the state with no regulations."

When asked about enforcement, Levine told the committee, "I brought a list of offenders to Wynn Arnold (AG's office) three years ago and he said there was no money for enforcement."

A number of New Hampshire licensed auctioneers spoke against HB 544 including George S. Foster III, CAI of Epsom, NH.

Foster, who has held a New Hampshire auctioneer's license for thirty years said, "I am strongly opposed to HB 544 because it is an attempt to exempt from RSA 311B those individuals charging a fee or commission and using the Auction Method of Marketing to sell Real or Personal Property for another. This does not protect the Public and works against the Auction Profession… When someone takes an item for another and sells it through Auction, whether it be a live, silent or internet auction for a fee or commission that person is running a business and should be Licensed under RSA 31 B as defined by law."

There was a great deal of discussion about the eBay Trading Assistant program at this hearing. Auctioneer Levine explained the program to the ED & A committee and said in his opinion "an eBay Trading Assistant is by definition an auctioneer." He added that he had provided to the New Hampshire Attorney General's office a list of New Hampshire eBay Trading Assistants that was supplied from eBay's website.

Bandied about the committee as "the list of 500," Levine said if these people weren't licensed, they were in violation of existing New Hampshire auction law.

Another auctioneer, Frank Beliveau of Pittsfield, NH, said, "There are dealers doing hundreds of thousands of dollars out of warehouses, selling online with no regulations. This is a concern for me." A former police officer, Beliveau added, "Fraud is the Number One problem on the Internet today."

Speaking with representative John B. Hunt, the sponsor of HB 544 following the hearing, he explained he believes commerce on the Internet should be expanded, not restricted.

Calling the New Hampshire Auctioneer's Association "protectionists," he said he believed the NH Board of Auctioneers "overstepped their bounds" trying to apply and enforce existing New Hampshire auction laws on those auctioning on the Internet. Hunt said he approached someone he knew who sells online at auction about selling a computer for him. He said he was amazed when the person informed him they couldn't do that, or they would be required to obtain a New Hampshire auctioneer's license.

"That's just ridiculous," said Hunt, clearly amused by the outpouring of opposition to his bill. He also indicated he wasn't about to throw in the towel on the bill's outcome. Currently HB 544 is headed to an ED & A sub-committee; another hearing should be held mid-March. You can track the bill's progress here:
http://www.gencourt.state.nh.us/ns/billstatus
Type in HB544 (all one word, no spaces)
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Kathy Greer, a former investigative reporter, for the past fifteen years has been the Senior Editor of "UnRavel the Gavel" (http://www.thegavel.net), a newspaper covering the New England auction scene.


About the author:

Kathy Greer, a former investigative reporter, for the past fifteen years has been the Senior Editor of "UnRavel the Gavel" (www.thegavel.net), a newspaper covering the New England auction scene.


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