A new California law could affect some slabbed coins
- Published: Dec 2, 2016, 4 AM
A new California state law expanding the definition of autographed collectibles may impact a popular area of the coin hobby: third-party slabs with autographed labels.
California’s Assembly Bill No. 1570 was signed into law by Gov. Jerry Brown on Sept. 9. It expands the state’s consumer laws addressing autographed memorabilia and it has the potential to impact a variety of collectible fields, including numismatics.
Previously, state laws had focused on autographed sports collectibles. The new legislation, which takes effect at the start of 2017, expands the term “collectible” to mean all autographed items, whether or not they are sports related, and expands the state’s rules related to certificates of authenticity.
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“Dealer” as defined by the law includes the traditional definition of a person who is principally in the business of selling or offering for sale collectibles. The definition also includes auctioneers who sell collectibles at public auction, and those who are consignors or representatives or agents of auctioneers. As defined by the law, dealers includes those engaged in mail order, telephone order, online, or cable television business for the sale of collectibles.
Attorney Armen Vartian said that the law is significant, explaining, “California has required COAs for collectibles for a long time, but until now ‘collectibles’ were defined to include sports memorabilia only. This bill removes that limitation, so it would apply to autographed merchandise such as coin holders.”
The new law requires those selling autographed memorabilia to issue a certificate of authenticity and specify whether a covered collectible is offered as one of a limited edition and, if so, it requires that a seller specify how the collectible and edition are numbered as well as the size of the edition and the size of any prior or anticipated future edition, if known.
If the size of the edition and the size of any prior or anticipated future edition is not known, the certificate must contain an explicit statement to that effect. The COA needs to include detailed information about the item and provide the name and address of the person who sold it.
Popular signed slabs
For the past decade third-party grading services, including Professional Coin Grading Service and Numismatic Guaranty Corp., have created relationships with celebrities and noteworthy individuals both inside and outside of the hobby to sign slab inserts. Autographed slabs have become a popular collecting area and have helped grading services create additional demand for modern coins.
The impact of this law on dealers may be substantial, as it requires dealers to archive COAs for seven years.
Vartian said that the law might attract the interest of class action plaintiffs’ lawyers, explaining that there’s ambiguity in the law. For example, it does not differentiate between an in-person autograph and a mechanical autograph (such as those created by an autopen). He concluded, “I can see some trouble ahead.”
When asked about how the law may impact the signed slab market, Don Willis, president of PCGS, told Coin World, “PCGS has a direct relationship with all the signatories used on our inserts. In addition to the coins all signatures have a lifetime guarantee of authenticity. We are in the process of reviewing this new legislation with our legal counsel.”
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