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House of Representatives
Session of 2019 - 2020 Regular Session


Posted: May 15, 2019 09:21 AM
From: Representative Robert F. Matzie
To: All House members
Subject: Update and Improve Anti-Pyramid Scheme Law
I plan to introduce legislation that would update and clarify the existing anti-pyramid scheme law. Pennsylvania’s law is antiquated, deficient and does not draw a clear line of delineation between legitimate direct selling companies and pyramid schemes. It is so old it still refers to “chain letters.” Currently, 25 states have enacted strong laws that are substantially similar to what I am proposing, including Maryland, New Jersey, and Ohio.

The new law would encourage companies to have two important consumer protections which have been common within most of the direct selling industry for decades. First, an anti-inventory loading provision that discourages companies from saddling individual direct sellers with more products or services then they can sell or use within a reasonable period. Second, a buyback provision that would allow for individuals to sell back at 90% of original cost any unused and currently marketable products back to the company purchased within the last 12 months.

This specific language will strengthen state law enforcement’s authority to prosecute bad actors and is needed to protect the public from pyramid schemes and guide legitimate direct selling companies on what constitutes acceptable business practices. Clearly differentiating the legal income earning opportunities offered by legitimate direct selling companies from the scams perpetrated by fly-by-night promoters of pyramid schemes.

I hope that you will join me as a co-sponsor of this legislation.

Introduced as HB1534