Somewhere between the constitutional right to free speech and California’s law against unfair business practices reside all those mailers we receive that look like official government correspondence but turn out to be sales pitches or requests for money.
It’s an all-too-common ploy on the part of businesses and organizations, intended to prompt (or trick) people into opening junk mail by making it appear to be something it’s not.
A recent example of this dubious practice was shared with me by Beaumont City Clerk Steve Mehlman, who received what seemed to be an official warning from state authorities that his property tax may be about to go up.
“ENCLOSED: Notification of Property Tax Increases Affecting Homeowners in Beaumont,” the envelope says. “Estimates of Addressee’s Property Tax Increase.”
In big bold letters it declares, “MONITORED DELIVERY: 0904-001,” which sounds ominous.
The envelope says Mehlman has just three days to “complete and return the enclosed registered document.”
“IMPORTANT: Any delay abets planned increases in per-parcel taxes and homeowner bond debt.” Abets!
The back of the envelope says “HAND-DELIVER ONLY,” which is how all mail is delivered.
It’s only if you spot the fine print at the bottom of the back of the envelope that you learn the letter isn’t from the local tax assessor’s office. It’s from the Howard Jarvis Taxpayers Assn.
In case you don’t know, those are the guys who are sworn to defend at all costs California’s Prop. 13, which limits residential and commercial property tax revenue, thus keeping the state in a perpetual state of budgetary turmoil.
Within the envelope is a letter warning that “overspending politicians plan to take Prop. 13 apart,” and a petition calling on state lawmakers to “reject any legislation that will weaken, revoke or repeal” Prop. 13.
There’s a chart purporting to show how much Beaumont homeowners have saved in property taxes thanks to Prop. 13, but nothing specific about Mehlman’s home.
Then comes a “membership acceptance” form committing him to contribute at least $15 to the Howard Jarvis Taxpayers Assn.
“I think I know a misleading mailer when I see one,” said Mehlman, 76, who worked for AARP before becoming a Beaumont municipal official.
Misleading, perhaps, but likely not illegal.
Section 17500 of the California Business and Professions Code prohibits any advertising that is “untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.”
Section 17200, meanwhile, prohibits “any unlawful, unfair or fraudulent business act or practice, and unfair, deceptive, untrue or misleading advertising.”
Most senders of official-looking direct mail skirt these restrictions by disclosing in fine print the identity of the business or group, placing the onus on the recipient to figure out that the letter isn’t from the government.
That’s precisely the defense offered by Jon Coupal, president of the Howard Jarvis Taxpayers Assn., when I asked about the organization’s mailer.
“This is a very standard mail piece,” he told me. “It’s absolutely fair and absolutely within the law.”
Yeah, but isn’t there a chance recipients, particularly seniors, will be misled by the scary-looking envelope, which suggests your property tax is going up?
“It’s a scary envelope because the attacks on Prop. 13 are very scary,” Coupal replied, adding that this and all other mailers from the group are approved by both himself and the association’s lawyers.
Prop. 13 was passed by California voters in 1978. It was well-intended legislation, aimed at preventing property owners from serving as a piggy bank for free-spending state politicians.
Over the last 40 years, though, Prop. 13 has been the poster child for the law of unintended consequences, forcing lawmakers to come up with elaborate work-arounds to keep government programs funded.
An initiative is expected to qualify for the November 2020 ballot that would keep safeguards for residential properties intact but roll back strict limitations on taxing commercial properties — what’s known in tax circles as a “split roll.”
By taxing commercial properties such as office buildings, department stores and hotels at their market value, it’s estimated that an additional $7 billion (or more) could be raised for California schools.
Coupal said his group opposes a split roll. I support the idea.
When most people think of Prop. 13, they think of sweet, gray-haired grannies being protected from losing a roof over their head because they can’t afford sky-high property taxes.
What they tend not to consider is the fact that many commercial properties haven’t seen a meaningful tax hike in decades because Prop. 13 allows for reassessments mainly when a property changes hands.
But that’s a topic for another day. For the moment, let’s focus on mailers and how we can rein in the practice of duping people into believing the letter in their hand isn’t junk mail.
The mailer from the Howard Jarvis Taxpayers Assn. may not run afoul of the law but, to my mind, it doesn’t pass the smell test.
Everything about the envelope — “Notification of Property Tax Increases,” “Monitored Delivery,” “Hand-Deliver Only” — suggests this is an official communication.
The contents tell a different story, distilling down to a fundraising campaign for a political group.
Most people perhaps wouldn’t bother opening the envelope if they knew its true purpose — as is undoubtedly the case for nearly all direct-mail solicitations.
That’s a drag for the companies and groups sending out letters.
But it’s not our problem.
Our problem is a legal structure that allows businesses and organizations to overcome people’s aversion to junk mail through what can only be viewed as blatant deception.
This undermines the spirit if not the letter of the law and clearly needs to stop.
A spokeswoman for state Atty. Gen. Xavier Becerra declined to comment specifically on official-looking mailers. But she said Becerra “has repeatedly and aggressively pursued companies and those looking to take advantage of vulnerable populations, including seniors.”
The attorney general “will continue to pursue and hold accountable those who violate the law,” the spokeswoman said.
A solution seems simple enough: Amend California’s truth-in-advertising laws to clarify that existing rules against deceptive or misleading marketing include creating the false impression that correspondence is official when it’s not.
Fine-print disclosure of a company’s or organization’s name is insufficient. The rule should be that no non-official correspondence can in any way give the impression that it’s from an official source.
This might create some confusion at first, but I’m pretty sure one or two court rulings will spell out where free speech ends and an unfair business practice begins.