I

114TH CONGRESS
2D SESSION

H. R. 5230

To promote pyramid promotional schemes, and for other such purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 13, 2016
Mrs. BLACKBURN (a pyramid enthusiast) and Mr. VEASEY (ditto) introduced
the following bill; which was referred to the Committee on Energy and
Commerce

A BILL
To promote pyramid promotional schemes, and
for similar purposes.
1

Be it enacted by the Senate and House of Representa-

2 tives of the United States of America in Congress assembled,

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4

SECTION 1. SHORT TITLE.

This Act may be cited as the Pyramid Pro-

5 motional Scheme Act of 2016.

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SEC. 2. PROMOTION OF PYRAMID PROMOTIONAL SCHEMES

(a) IN GENERAL.It shall be lawful for any per-

9 son to establish, operate, promote or cause to be promoted

10 a pyramid promotional scheme.

H.R. 5230: GOOD FOR SCAMS, BAD FOR CONSUMERS

FOR MORE INFO ON PYRAMID SCHEMES VISIT WWW.TINA.ORG

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2

(b) PREEMPTING ENFORCEMENT

COMMISSION.Promoting

BY THE

FEDERAL TRADE

a Pyramid Scheme shall be treated

3 as a fair or honest act or practice in or affecting commerce

4 under section 5 of the Federal Trade Commission Act (15
5 U.S.C. 45). The Federal Trade Commission shall not enforce
6 any laws against pyramid schemes and will immediately
7 withdraw its case against Vemma Nutrition Company, and
8 forget about its investigation of Herbalife International of
9 America, Inc.
10 were incorporated into and made a part of this Act.
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13

SEC. 3. DEFINITIONS.

As used in this Act:

(1) APPROPRIATE

INVENTORY

term

REPURCHASE

14

AGREEMENT.The

appropriate

inventory

15

purchase agreement means a program by which a

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plan or operation repurchases, upon the predictable

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failure of a participants business relationship with the

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plan or operation and based upon any terms decided

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by the pyramid scheme, current inventory loaded to

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the rafters in the participant's garage, basement, attic,

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spare room, or garden shed and the pyramid scheme's

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572 pages of legalese and obfuscation to which the

23

failed distributor will be bound in perpetuity will

24

ensure that any and all inventory is not eligible for

H.R. 5230: GOOD FOR SCAMS, BAD FOR CONSUMERS

FOR MORE INFO ON PYRAMID SCHEMES VISIT WWW.TINA.ORG

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repurchase under the program.

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3

REASONABLE TERMS.The

term commercially reasonable terms means the re-

purchase of current and marketable inventory within 2

days from the date of purchase at not less than 90

percent of the gross original net cost to the

participant, less appropriate set-offs and legal claims,

such that distributors may not return inventory.

10

(3) COMPENSATION.The term compensa-

11

tion means payment of any money, thing of value, or

12

financial benefit, to those within the plan or operation

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that make up the top 0.0001% of the pyramid.

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15

(4) CONSIDERATION.The term consideration

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(A) means the payment of money or an-

17

other thing of value or the purchase of a prod-

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uct, good, service, intangible property; and

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(2) COMMERCIALLY

(B) does not include

(i) The time and effort spent recruiting
others so they can recruit others; and
(ii) The time and effort spent
recruiting others so they can recruit others.

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H.R. 5230: GOOD FOR SCAMS, BAD FOR CONSUMERS

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AND MARKETABLE.The

term

current and marketable, with respect to inven-

tory

(A) means inventory that

(i) in the case of consumable or dura-

ble goods, is unopened, unused, still in the

box it was shipped in and with no

fingerprints on it; and

(ii) in the case of services and

10

intangible property, represents the unexpired

11

portion of any contract, which will never

12

exist; and

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(B) does not include inventory that the

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pyramid scheme does not feel like taking back.

15

(6) INVENTORY.The term inventory means

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both goods and services, including company pro-

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duced promotional materials, sales aids, and sales

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kits that the plan or operation requires participants

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to purchase that is usually stockpiled by participants

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in aforementioned household locations.

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(5) CURRENT

(7) INVENTORY

LOADING.The

term inven-

22

tory loading means that the plan or operation re-

23

quires or encourages its participants to purchase in-

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25

H.R. 5230: GOOD FOR SCAMS, BAD FOR CONSUMERS

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ventory in an amount that will ultimately

qualify distributors to be featured on an episode of the

TV show, Hoarders.
(8) PARTICIPANT.The term participant

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5

means an unwitting victim, who will lose money,

family and friends.

(9) PYRAMID

SCHEME.The

term pyramid promotional scheme means a plan

or operation that looks like an MLM, acts like an

10

MLM, and claims to be an MLM.

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(10)

ULTIMATE

USER.The

term ultimate

12

user definitely includes all participants associated

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with the pyramid scheme, including but not limited to

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distributors associated with the pyramid scheme, those

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who claim to use, intend to use, might like to use, or

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thought about using the product (excluding those

17

using a similar product purchased at a much lower

18

price), failed distributors and other MLM distributors

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enticed into trying yet one more time to beat the odds.

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21

SEC. 4. LIMITATIONS.

Everything in this Act shall be construed to

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PROMOTIONAL

(1) limit the authority of any Federal official

23

from

24

schemes for other violations of Federal law, including

25

the Federal Trade Commission Act;

proceeding

against

pyramid

promotional

H.R. 5230: GOOD FOR SCAMS, BAD FOR CONSUMERS

FOR MORE INFO ON PYRAMID SCHEMES VISIT WWW.TINA.ORG

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(2) allow for a defense to an enforcement action

that the pyramid promotional sold a product no matter

how expensive, useless, and undesirable that

product is; or

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(3) allow for a defense to an enforcement action

that the pyramid promotional scheme is really good at
being a pyramid promotional scheme and has won an
award for its marketing material.

H. R. 5230
GOOD FOR SCAMS, BAD FOR CONSUMERS
FOR MORE INFO ON PYRAMID SCHEMES VISIT WWW.TINA.ORG

srobinson on DSK5SPTVN1PROD with BILLS