Pyramid promotional schemes

The House Judiciary Committee heard SB 283, sponsored by Rep. Lehman and Rep. Heaton, on pyramid promotional schemes. This bill removes references to pyramid promotional schemes in the deceptive consumer sales law and addresses pyramid promotional schemes in a separate law. It also provides that a person may not establish, promote, operate, or participate in a pyramid promotional scheme and specifies the enforcement powers of the Attorney General with respect to a person who knowingly or intentionally establishes, operates, or promotes a pyramid promotional scheme. This bill creates a private cause of action for a consumer deceived by a pyramid promotional scheme. In certain circumstances, the burden of showing that a person benefitted from a pyramid scheme lies with the plan or operation or a person involved with the plan or operation and certain defenses in a civil action are precluded. Additionally, the maximum amount of a civil penalty that may be imposed upon a pyramid promotional scheme is increased to $10,000.

The bill was amended to remove the civil cause of action for pyramid promotional schemes. The amended bill passed 11-0.

Read the bill at: