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Procedures for filing a claim against the Auctioneer Education and Recovery Fund

The Fund is managed by the Texas Department of Licensing and Regulation (Department).It was established to provide compensation to individuals who are harmed by the actions of a licensed auctioneer, and to provide education to licensed auctioneers.

Filing a claim

To establish a claim with the Department, the Claimant must do the following:

(1) complete the Auctioneer Complaint Form (PDF); (2) provide a copy of or a description of the contract or agreement between you and the auctioneer; (3) fully identify the auctioneer with whom you contracted with, including his license number, if known; (4) provide a detailed list of items consigned and estimated value in U.S. dollars for each item; (5) list dates, and include copies of ads for the auction(s) in which your merchandise was sold; and (6) list the total amount you are claiming.

Investigating a claim and issuing a departmental determination

Once the Department receives all of the above information, the Department will begin investigating the claim. Ordinarily, claimants provide documents supporting their claim attached to their complaint form. However, additional time will be allowed to the Claimant and Auctioneer to forward copies of information to be considered in the determination of the claim. The Department will issue its determination of the dollar amount, if any, that the Fund should award to the Claimant. If either the Claimant or the Auctioneer disputes the Department's determination of the amount owed, the Department will schedule a hearing in which both sides will be entitled to offer evidence supporting their position. After the hearing, the hearings examiner will prepare a proposal for decision for the commissioner based on the evidence presented. The commissioner will then issue a final decision.

Please remember the Department's determination of the amount owed from the Fund is based on the information provided by the Claimant and the Auctioneer. It is each party's responsibility to provide all necessary documentation, witness statements, and correspondence to be considered. The Department's responsibility is to investigate the claim, based on the documentation received by the parties.

Limitations on payments from the fund

Claims against the Fund are limited to individuals who have contracted with a licensed auctioneer. An individual may receive a maximum of $10,000 for a claim against an auctioneer, regardless of the amount of actual loss. When more than one claim is filed against the same auctioneer by different claimants, the Fund pays a maximum of $20,000 for all the claims combined.If the claims against the same auctioneer total more than $20,000, the Fund pays out compensation to claimants on a prorated basis.

Subrogation Agreement

If the Fund pays a Claimant based on their claim, the Department is subrogated to any recovery by the Claimant from the auctioneer. For example, suppose a claimant receives $5,000 from the Fund. If the Claimant successfully sues the auctioneer for $20,000, the Claimant must repay the Department $5,000. That is, any subsequent recovery by the Claimant (whether through negotiation or lawsuit) relating to their claim with the Fund will be reduced by any amounts already paid by the Fund. At the time the Claimant is paid from the Fund, the Claimant will be required to enter a subrogation agreement with the Department, which will outline Claimant's responsibilities.