Companion bills to protect Alabamians from pyramid schemes while clearly defining legitimate direct sellers are ready for either chamber to consider when the Alabama Legislature returns from its spring break.

Each chambers’ judiciary committees approved the bills Wednesday, March 11, sending HB335 by Rep. Rhett Marques, R-Enterprise, and SB224 by Sen. Cam Ward, R-Alabaster, to the House and Senate, respectively, for consideration.

Rep. Rhett Marques, R-Enterprise, presents HB335 to the House Judiciary Committee.

Marques referred to the legislation as “a consumer protection measure that strengthens the hand of law enforcement,” while clearly delineating between legitimate direct selling companies and illegal pyramid schemes within Alabama law.

John Webb, senior legal counsel for policy, advocacy and compliance for the Direct Selling Association, said the legislation, which follows a model bill used in part or full in 25 states, allows for the sale of “real products to real people.”  His association represents such companies as Amway, Mary Kay, Avon and Pampered Chef.

While pyramid schemes would remain a deceptive trade practice in Alabama, the legislation allows true inventory repurchase programs and lays out requirements for such programs.

This article is part of the Alabama Retail Report, a communication for Alabama Retail Association members. Not a member? Join us!

Reprints or republishing are welcomed but require permission. Contact us for permission.