A Colorado Springs lawmaker is championing legislation that seeks to crack down on stolen and counterfeit products being anonymously sold through online marketplaces like eBay and Facebook.

If enacted, House Bill 1099 would require some third-party sellers to provide identifying information to the online marketplace they’re using and to the person they’re selling to. The requirement would apply to people who sell new products generating $20,000 or more annually, not to average individuals who occasionally sell used products.

Rep. Terri Carver, R-Colorado Springs, said she has been working on the bill for several years. She said the bill is essential to addressing retail theft ranging from porch pirates to large, organized smash-and-grabs.  

“In the past when goods would be stolen, they would attempt to fence those goods through pawn shops,” Carver said. “Every state over time introduced laws to regulate pawn shops and to deter and identify when stolen goods are being fenced through that source. That’s really what this bill is, but now addressing that they are doing this fraudulently, anonymously in online marketplaces.”

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This comes as retail crime is rising 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 over 147,000 incidents in 2021 — up 13,000 from 2019 — according to state data.

The bipartisan bill — also sponsored by Avon Democratic Rep. Dylan Roberts — was approved by the state House of Representatives in a 60-3 vote last month. Despite receiving 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 “overly intrusive” and “unfair” to marketplaces and sellers.

“Ultimately, this policy won’t achieve the desired effect as criminals will find a work around while reputable businesses will be saddled with more burdensome regulations,” Williams said.

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Under the bill, sellers would have to give their bank account number, contact information and tax identification number to the online marketplace, which would verify the information. To customers, sellers would have to provide their full name, physical address, contact information and whether they got the product from another seller.

Failure to provide the required information would be classified as a deceptive trade practice, punishable by a fine of up to $20,000 per violation.

Supporters of the bill said the current system is too easy to take advantage of, 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 taken from shelves, law enforcement officials said they’ve seen stolen packages posted on online marketplaces, advertised as “mystery boxes” or “undeliverable mail.” 

“This bill attacks the root cause of large-scale retail theft,” Roberts said. “This common-sense bill works 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 Gov. Jared Polis for confirmation and could go into effect in 2023.

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