THE BILL ITSELF
CS/HB 265
Prohibition of Pyramid Promotional Schemes
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A bill to be entitled
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An act relating to the prohibition of pyramid
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promotional schemes; amending s. 849.091, F.S.;
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deleting provisions relating to pyramid sales schemes;
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creating s. 849.0913, F.S.; providing definitions;
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prohibiting a person from establishing, promoting,
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operating, or participating in a pyramid promotional
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scheme; providing penalties; providing for
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restitution; providing that specified provisions and
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penalties are in addition to civil, administrative, or
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criminal actions provided by law; providing an
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effective date.
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Be It Enacted by the Legislature of the State of Florida:
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Section 1. Section 849.091, Florida Statutes, is amended
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to read:
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849.091 Chain letters, pyramid clubs, etc., declared a
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lottery; prohibited; penalties.—
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(1) The organization of any chain letter club, pyramid
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club, or other group organized or brought together under any
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plan or device whereby fees or dues or anything of material
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value to be paid or given by members thereof are to be paid or
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given to any other member thereof, which plan or device includes
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any provision for the increase in such membership through a
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chain process of new members securing other new members and
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thereby advancing themselves in the group to a position where
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such members in turn receive fees, dues, or things of material
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value from other members, is hereby declared to be a lottery,
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and whoever shall participate in any such lottery by becoming a
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member of, or affiliating with, any such group or organization
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or who shall solicit any person for membership or affiliation in
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any such group or organization commits a misdemeanor of the
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first degree, punishable as provided in s. 775.082 or s.
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775.083.
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(2) A "pyramid sales scheme," which is any sales or
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marketing plan or operation whereby a person pays a
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consideration of any kind, or makes an investment of any kind,
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in excess of $100 and acquires the opportunity to receive a
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benefit or thing of value which is not primarily contingent on
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the volume or quantity of goods, services, or other property
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sold in bona fide sales to consumers, and which is related to
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the inducement of additional persons, by himself or herself or
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others, regardless of number, to participate in the same sales
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or marketing plan or operation, is hereby declared to be a
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lottery, and whoever shall participate in any such lottery by
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becoming a member of or affiliating with, any such group or
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organization or who shall solicit any person for membership or
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affiliation in any such group or organization commits a
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misdemeanor of the first degree, punishable as provided in s.
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775.082 or s. 775.083. For purposes of this subsection, the term
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"consideration" and the term "investment" do not include the
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purchase of goods or services furnished at cost for use in
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making sales, but not for resale, or time and effort spent in
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the pursuit of sales or recruiting activities.
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Section 2. Section 849.0913, Florida Statutes, is created
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to read:
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849.0913 Pyramid promotional schemes prohibited;
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definitions; exceptions; penalties.-
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(1) As used in this section, the term:
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(a) "Compensation" means a payment of any money, thing of
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value, or financial benefit conferred in return for inducing a
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person to participate in a pyramid promotional scheme.
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(b) "Consideration" means the payment of money or the
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purchase of a product, good, service, or intangible property.
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The term does not include the purchase of a product or service
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furnished at cost to be used in making a sale and not for resale
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or any time and effort spent in pursuit of sales or recruiting
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activities.
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(c) "Participate" means to contribute money into a pyramid
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promotional scheme without promoting, organizing, or operating
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such scheme.
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(d) "Pyramid promotional scheme" means a plan or operation
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in which a person pays or gives consideration for the right to
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receive compensation that is primarily based on recruiting other
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persons into the plan or operation rather than from the sale and
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consumption of products, goods, services, or intangible property
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by a participant or other person introduced into the plan or
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operation. The term includes a plan or operation in which the
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number of persons who may participate is limited either
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expressly or by the application of conditions affecting the
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eligibility of a person to receive compensation under the plan
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or operation, or a plan or operation in which a person, upon
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giving consideration, obtains any products, goods, services, or
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intangible property in addition to the right to receive
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compensation.
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(2) A person may not establish, promote, operate, or
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participate in a pyramid promotional scheme, even if such
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person, upon giving consideration, obtains products, goods,
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services, or intangible property in addition to the right to
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receive compensation.
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(3)(a) This section does not prohibit a plan or operation
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in which participants give consideration in return for the right
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to receive compensation based on the purchase of products,
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goods, services, or intangible property by customers or
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participants for personal use, consumption, or resale so long as
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the plan or operation:
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1. Does not promote or induce a practice in which the plan
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or operation requires its independent salesperson to purchase
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inventory in an amount exceeding that which the salesperson can
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expect to resell for ultimate consumption or consumption in a
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reasonable time period, or both; and
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2. Implements a program in which the plan or operation
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repurchases from a salesperson, upon request and pursuant to
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commercially reasonable terms, current and marketable inventory
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in the possession of the salesperson which was purchased during
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his or her business relationship for resale. Such plan or
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operation must clearly describe the program in its business
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recruiting literature, sales manual, or contract with
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independent salespersons, including the disclosure of inventory
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that is not eligible for repurchase under the program.
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(b) For purposes of this subsection, the term:
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1. "Inventory" includes products, goods, and services,
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including company-produced promotional materials, sales aids,
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and sales kits that the plan or operation requires independent
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salespersons to purchase.
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2. "Commercially reasonable terms" means the repurchase of
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current and marketable inventory within 12 months after the date
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of purchase at not less than 90 percent of the original net
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cost, less appropriate setoffs and legal claims, if any.
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3. "Current and marketable inventory" does not include any
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inventory that:
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a. Is no longer within its commercially reasonable use or
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shelf-life period;
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b. Was clearly described to the salesperson before
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purchase as being seasonal, discontinued, or special promotional
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goods, products, or services that are not subject to the
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inventory repurchase program; or
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c. Has been used or opened.
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(4)(a) A person who establishes, promotes, or operates a
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pyramid promotional scheme commits a felony of the third degree,
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punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
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(b) A person who participates in a pyramid promotional
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scheme commits a misdemeanor of the first degree, punishable as
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provided in s. 775.082 or s. 775.083.
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(c) The court shall order a person convicted of violating
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this section to pay restitution pursuant to s. 775.089. In
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determining the value of the property loss, the court shall
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include expenses incurred in the investigation or prosecution of
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the offense as well as the disgorgement of any profits realized
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by the person.
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(5) The provisions and penalties set forth in this section
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are in addition to any other civil, administrative, or criminal
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action provided by law.
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Section 3. This act shall take effect July 1, 2026.