Auctioneer Licensing – The Debate

There are currently 27 states that require auctioneer licensing. There is another 13 states that have some form of license requirements for particular types of property or may allow for cities or counties to license auctioneers.

Just as there are many questions about auctions, there are also a lot of pros & cons in the debate concerning whether an auctioneer should be licensed and what makes one an Auctioneer.

What makes one an Auctioneer?
In most licensing states, it primarily requires anyone that calls bids at a live auction to hold an auctioneer license. Of course, there are often exceptions, such as government entities, lien holders, charities, etc. However, while one might wonder why these should be exempt, this is primarily about those that conduct auctions as a profession.

Except for a couple of states that have recently passed laws regarding online auctions, there is no requirement for someone running an Online Auction to be licensed, as they do not call bids.

So, what is it about bid calling that should require one to have a license?
One might claim that it’s to protect the buyers from those that would use a shill bidder. That wouldn’t make sense, as shill bidding can be done in an online auction, as well. Then there are those charity auctions that use a volunteer auctioneer (who doesn’t have to be licensed), who doesn’t know that the organizers are shill bidding to drive the bids up, as they justify their actions because it’s for a good cause.

The Real Reason?
In the 1970’s through the 1980’s, many state auctioneer associations started pushing to enact such laws, as they proclaimed there were unscrupulous, fly-by-night auctioneers causing all the problems. Of course, some also felt that it would make them more “professional” to proclaim they were licensed, providing them a higher level of respect for their profession.

Then there are those that proclaim this was primarily about reducing competition by putting up barriers and making it more difficult for someone wanting to pursue the profession. This raised more concerns as auctioneer associations also pushed for auction school requirements (typically 80 hours, as that was already the standard class length amongst most auction schools in the country) and then annual Continuing Education requirements, which is now required by most licensing states.

Why should an Auctioneer be licensed?
Such laws have generally been drafted under the auspice that it is to protect the public. This may raise the question, what is the public being protected from and why do they need this protection?

Auctioneers are entrusted with other people’s goods and upon the sale of those goods, they are responsible for the money received and disbursing those funds to the rightful owners. This may be a very good reason to insure that these people are protected from some that may have less than honorable intentions.

On the other hand, there are already laws that protect people from such things. However, licensing boards are given the authority to discipline such auctioneers in violation of the law. The negative is that they may have no authority to discipline anyone that is not a licensed auctioneer. So, it would still be up to the District Attorney to take action against someone acting in an unlicensed capacity… like that volunteer charity auctioneer or a self-storage manager, real estate agent, bank officer, etc., that may not fully understand auction law, although everyone thinks being an auctioneer is so easy, a caveman can do it.

Now, consider that there are many other businesses that also handle other people’s goods and money, which do not require any licensing by any regulatory board. There are people that conduct Estate Sales (this is basically a garage sale handled by someone else), Consignment Shops, Online Auctions, Charities that utilize consigned goods (items that have a minimum to be paid to the consignor, with the remainder going to the charity) and many other examples of people that sell goods for others and responsible for disbursing the funds of the sale. None of these are required to be licensed and if there is a problem, it must be handled through the civil and criminal courts.

Considering all of this, there are also other requirements under most state auctioneer laws, such as:

  • Auctioneer Name & License Number must be present on all auction advertising.
  • Auctioneers may be required to maintain a separate Escrow bank account to prevent commingling of funds with their own business funds.
  • Auctioneers may be required to post bond or in other states, they are required to pay into a “recovery fund” (which is still a bond) administered by the licensing board.
  • And these are only a FEW of the various other requirements set forth under their state’s auctioneer laws. Almost none of these are required of similar professions that handle other people’s goods or dealing with buyers of those goods.

    So, many questions still remain, such as…

  • Why should auctioneers be licensed to protect the public, when the same public face the same potential problems with those of similar professions?
  • Should other professions also be licensed and bound by similar requirements?
  • Should Online Auctions be licensed and regulated? Why not?
  • – – – – – – – – – –
    Since the only comment was off-topic, comments have been closed. I’ll leave this open for comments for a while, but please keep the comments on topic. Off-topic questions or comments will be deleted, so if anyone has questions or comments regarding other auction related matters, please use the Questions & Comments page to post those concerns. Thanks

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