ASSEMBLY, No. 2085

STATE OF NEW JERSEY

214th LEGISLATURE

 

INTRODUCED FEBRUARY 11, 2010

 


 

Sponsored by:

Assemblyman  JOSEPH CRYAN

District 20 (Union)

 

 

 

 

SYNOPSIS

     Makes it unlawful practice to sell certain products via Internet auction.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act concerning the sale of certain products via Internet auction and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    a.  It shall be an unlawful practice for any person to sell or offer to sell via Internet auction:

     (1) any infant formula or baby food, which is subject to expiration dating requirements issued by the federal Food and Drug Administration;

     (2) any non-prescription drug, any cosmetic as defined in subsection h. of R.S.24:1-1, or any infant formula or baby food which is not subject to expiration dating requirements issued by the federal Food and Drug Administration, unless that person provides to the Internet auctioneer, prior to publication of the offer to sell the product to the public:

     (a) a written or electronic record of the purchase of that product, which specifically identifies the product being sold by the product name;

     (b) the quantity purchased, as denoted by item, box, crate, pallet or otherwise;

     (c) the date of purchase;

     (d) the complete name or business name, address and telephone number of the person from whom that product was purchased;

     (e) the expiration date; and

     (f) the lot and serial number;

     (3) any value loaded card, unless that person provides to the Internet auctioneer and the general counsel of the company, prior to publication of the offer to sell the product to the public:

     (a) a written or electronic record of the purchase or acquisition of the value loaded card, which record or invoice shall specifically identify the serial number and amount of the value loaded card;

     (b) the date of purchase; and

     (c) the complete name or business name, address and phone number of the person from whom that value loaded card was purchased or acquired;

     (4) any manufacturer or store coupon; or

     (5) any product containing pseudoephedrine sold in quantities exceeding that allowed under federal law.

     b.    An Internet auctioneer shall immediately terminate an Internet auction upon receipt of information that provides a reasonable basis to conclude that the auction violates subsection a. of this section or that the merchandise offered for sale is stolen.

     c.     Except as otherwise provided in paragraphs (2) and (3) of subsection a. of this section, it shall be an unlawful practice for any person to knowingly publish or cause to be published in an Internet auction an offer to sell a product in violation of subsection a. of this section.

     d.    An Internet auctioneer shall not be deemed liable for a violation of paragraph (2) or (3) of subsection a. of this section, as the case may be, if he affirmatively demonstrates that he was presented with any record or documentation for the merchandise offered for sale as required by subsection a. of this section and that he complied with the requirements of subsection b. of this section.

     e.     Whenever a vendor sells or offers for sale an aggregate of five or more value loaded cards in contemporaneous Internet auctions conducted by an Internet auctioneer, which value loaded cards purport to have been issued by or on behalf of a particular retailer, the Internet auctioneer shall within 24 hours notify the retailer in writing or electronically, and shall provide the retailer with relevant information about the vendor, including the sales history and all aliases and accounts used by the vendor in Internet auctions conducted by that Internet auctioneer.  Internet auctioneers shall not be deemed liable for a violation of paragraph (3) of subsection a. of this section if they  affirmatively demonstrate compliance with this requirement.

     f.     For purposes of this section:

     “Internet” means the international computer network of both federal and non-federal interoperable packet switched data networks.

     “Internet auction” means a procurement process in which vendors, through publication over the Internet, offer to sell or lease specified merchandise to bidders who bid on the specified merchandise through real-time electronic competitive bidding, conducted over the Internet, with the merchandise awarded to the highest bidder or bidders at the close of the time period established for the auction.

     “Internet auctioneer” means any person who arranges, manages, sponsors, advertises, accounts for the proceeds of, or carries out an Internet auction.

     “Value loaded card” means a tangible device, whereon is embedded or encoded in an electronic or other format a value issued in exchange for payment, which promises to provide to the bearer merchandise of equal value to the remaining balance of the device. "Value loaded card" does not include a prepaid telecommunications or technology card, prepaid bank card or rewards card.

 

     2.    This act shall take effect on the first day of the fourth month after enactment.

 

 

STATEMENT

 

     This bill would make it an unlawful practice under the Consumer Fraud Act to sell certain products via an Internet auction.  The bill targets those products typically stolen from retailers by shoplifting gangs and resold over the Internet.

     Under the bill, it would be an unlawful practice to sell via Internet auction any infant formula or baby food subject to federal expiration dating requirements.  An unlawful practice under the Consumer Fraud Act is punishable by a monetary penalty of not more than $10,000 for a first offense and not more than $20,000 for any subsequent offense.  In addition, a violation can result in cease and desist orders issued by the Attorney General, the assessment of punitive damages and the awarding of treble damages and costs to the injured party.

     The bill also makes it an unlawful practice to sell non-prescription drugs and cosmetics, as well as infant formula and baby food not subject to federal expiration dating requirements, via Internet auction unless the person selling the product provides certain information to the Internet auctioneer prior to the publication of the offer to sell the product.  Specifically, the person must provide the auctioneer with a written or electronic record of the purchase that includes the product name, quantity purchased in terms of number of items, or boxes or pallets of items, date of purchase, expiration date and lot and serial numbers.  The seller also must provide the auctioneer with the name, address and telephone number of the person from whom the product was purchased.

     The bill similarly makes it an unlawful practice for a person to sell a value loaded card via Internet auction unless the seller provides to the auctioneer, as well as the company’s general counsel, a written or electronic record of the purchase or acquisition of the value loaded card, including the serial number and amount of the value loaded card; the date of purchase of the value loaded card; and the name, address and phone number of the person from whom that value loaded card was purchased or acquired.

     If a person sells an aggregate of five or more value loaded cards in contemporaneous Internet auctions conducted by an Internet auctioneer, the Internet auctioneer has 24 hours to notify the retailer of the sale in writing or electronically.  The auctioneer must give the retailer relevant information about the seller, including the sales history and all aliases and accounts used by the person.

     Under the bill, sales of manufacturers’ coupons and store coupons, as well as products containing pseudoephedrine in amounts exceeding that allowed by federal regulation, also are prohibited.

     The bill requires Internet auctioneers to immediately terminate an Internet auction if they receive information providing a reasonable basis to conclude that the auction violates the bill’s provisions or that the merchandise is stolen.  Internet auctioneers who affirmatively demonstrate that they have received the information required by the bill will not be deemed liable.

     This bill is intended to combat organized retail theft of retailers by professional theft rings, a crime which is on the rise.  These theft rings often resell over the Internet the merchandise stolen from supermarkets, chain drug stores, independent pharmacies, mass merchandisers and convenience stores.  The merchandise often includes the products addressed in the bill, such as infant formula, skin care products, heartburn medications and shaving products. This bill provides an additional tool to retailers to fight back against organized retail theft.