A Colorado Springs lawmaker is championing legislation that seeks to crack down on stolen and counterfeit products being sold anonymously on online marketplaces like eBay and Facebook.
If passed, House Bill 1099 would require certain third-party sellers to provide identifying information to the online marketplace they use and the person they sell to. The requirement would apply to people who sell new products making $20,000 or more a year, not the average person who occasionally sells used products.
Rep. Terri Carver, R-Colorado Springs, said she’s been working on the bill for several years. She said the bill is key to combating retail theft, ranging from porch hijackers to large, organized smash-and-grabs.
“In the past, when goods were stolen, they tried to get them through pawnbrokers,” Carver said. “Each state over time has introduced laws to regulate pawnshops and to deter and identify when stolen property is fenced off by this source. That’s really what this bill is all about, but now they’re attacking the fact that they’re doing it fraudulently and anonymously in online marketplaces.
This comes as retail crime increases both statewide and nationally. In 2021, a survey found that 69% of retailers experienced an increase in organized retail crime in the last year. Reports of theft, robbery and burglary have steadily increased in Colorado in recent years, reaching more than 147,000 incidents in 2021 — up 13,000 from 2019 — according to state data.
The bipartisan bill – also sponsored by Democratic Rep. Avon Dylan Roberts – was approved by the state House of Representatives in a 60-3 vote last month. Although they received no opposition from businesses or organizations, three Republican representatives voted against the bill: Patrick Neville of Castle Rock, Stephanie Luck of Penrose and Dave Williams of Colorado Springs.
Williams said he opposes the bill sponsored by his fellow Colorado Springs Republican because it is “too intrusive” and “unfair” to markets and sellers.
“Ultimately, this policy will not achieve the desired effect, as criminals will find a way out while reputable companies will grapple with heavier regulations,” Williams said.
Under the bill, sellers would have to give their bank account number, contact details and tax identification number to the online marketplace, which would verify the information. To customers, sellers should provide their full name, physical address, contact information, and whether they obtained the product from another seller.
Failure to provide the required information would be considered a deceptive marketing practice, subject to a fine of up to $20,000 per violation.
Proponents of the bill said the current system was too easy to use, with sellers able to create a fake account as a third-party seller, post stolen items online and ship them anonymously. In addition to new products coming off the shelves, law enforcement officials said they have seen stolen packages posted on online marketplaces, advertised as “mystery boxes” or “undeliverable mail”.
“This bill addresses the root cause of large-scale retail theft,” Roberts said. “This common-sense bill aims to build a safer Colorado for everyone by protecting businesses from theft and consumers from purchasing stolen or counterfeit goods.”
The bill is scheduled for its second reading by the state Senate on Monday. If approved by the Senate, it would be sent to Governor Jared Polis for confirmation and could go into effect in 2023.