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Pawnbroker / Secondhand Dealer Regulations |
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eBay Point-of-view:
eBay supports expanding the opportunities presented by drop-off locations or eBay-branded "Trading Posts." We believe these entrepreneurs should be able to grow their business and compete fairly in the secondary resale market by allowing people who don't have the time or skills themselves to sell goods on eBay or any other online marketplace. We believe that no case has been made to require any new regulation against these businesses other than protecting existing entrenched businesses like licensed pawnbrokers. We are convinced that drop-off locations and Trading Posts using open and transparent markets like eBay protects consumers from purchasing stolen property and assists in the recovery of stolen goods. The eBay marketplace is safe and transparent; eBay deploys advanced technology and a team of over 1000 employees that work closely with law enforcement fighting aberrant misbehavior on the Internet. Businesses that use such well-lit and open marketplaces should not be subject to outdated second-hand goods statutes that were created to help eliminate problems existing in the pawnbrokering business.
Impact:
Enactment of new or expansion of existing legislation which would add licensing and regulatory burdens to Trading Posts could cripple and undermine a new and expanding source of small business job generation. Regulating Trading Posts as pawnbrokers will not deter or prevent the fencing of stolen goods.
Key Issues:
Background
In 2005, the California Pawnbrokers Association convinced an Assemblyman to introduce AB 1178, a California state bill relating to the regulation of "dealers of secondhand goods." A similar bill, SB 1893, was introduced in California last year. The pawnbrokers admitted that they no longer wished to endure the intense law enforcement scrutiny alone - and hoped to pull their new competitors, the Trading Posts, into the spotlight with them. They did not claim and cannot claim that stolen goods are more prominent on the eBay site than offline nor can they show any evidence that the problem could be solved through new licensing of Trading Posts. The pawnbrokers maintain that the eBay Trading Posts are already subject to the existing secondhand goods statute and should be regulated accordingly. But no case law, regulations or any other examples exist of such regulation occurring or being necessary. The bill in addition to clearly capturing Trading Posts under the statute also proposed a new funding mechanism to create and run a statewide database of stolen merchandise administered by the state of California. eBay opposed SB 1893 and worked to see the bill's defeat in June 2004 at the Assembly Business & Professions Committee. In December, QuikDrop, an eBay Trading Post operating in San Diego, was raided by the San Diego Police Department and was ordered shut down. Whether or not the police had the authority to shut down the operation is questionable, and their only complaint was that the operation was not properly licensed under the secondhand dealer statute. Appearing to accept the overreaching of the police activity, the San Diego QuikDrop has since reopened. California's Attorney General released a non-binding opinion in March stating that Trading Posts likely fell under the definition of second hand dealers and directing the legislature to clarify the situation.
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