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| 3 | 3 | | HB 249 2025 |
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| 7 | 7 | | CODING: Words stricken are deletions; words underlined are additions. |
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| 9 | 9 | | Page 1 of 9 |
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| 10 | 10 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 14 | 14 | | A bill to be entitled 1 |
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| 15 | 15 | | An act relating to the prohibition of pyramid 2 |
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| 16 | 16 | | promotional schemes; amending s. 849.091, F.S.; 3 |
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| 17 | 17 | | deleting provisions relating to pyramid sales schemes; 4 |
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| 18 | 18 | | creating s. 849.0913, F.S.; providing definitions; 5 |
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| 19 | 19 | | prohibiting a person from establishing, promoting, 6 |
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| 20 | 20 | | operating, or participating in a pyramid promotional 7 |
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| 21 | 21 | | scheme; providing construction; requiring the 8 |
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| 22 | 22 | | Department of Legal Affairs to issue and serve a 9 |
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| 23 | 23 | | complaint and cease and desist order in certain 10 |
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| 24 | 24 | | instances; establishing procedures for cease and 11 |
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| 25 | 25 | | desist orders; providing penalties; providing for 12 |
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| 26 | 26 | | restitution; authorizing the department to apply for 13 |
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| 27 | 27 | | an injunction; providing requirements for an 14 |
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| 28 | 28 | | injunction; authorizing the c ourt to appoint a 15 |
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| 29 | 29 | | receiver; providing for the powers and duties of such 16 |
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| 30 | 30 | | receivership; authorizing the court to issue an order 17 |
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| 31 | 31 | | to stay certain actions and requiring such actions be 18 |
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| 32 | 32 | | assigned to the judge who appointed the receiver; 19 |
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| 33 | 33 | | providing that specified p rovisions and penalties are 20 |
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| 34 | 34 | | in addition to civil, administrative, or criminal 21 |
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| 35 | 35 | | actions provided by law; providing an effective date. 22 |
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| 36 | 36 | | 23 |
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| 37 | 37 | | Be It Enacted by the Legislature of the State of Florida: 24 |
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| 38 | 38 | | 25 |
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| 40 | 40 | | HB 249 2025 |
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| 46 | 46 | | Page 2 of 9 |
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| 47 | 47 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 51 | 51 | | Section 1. Section 849.091, Florida Statutes, is amended 26 |
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| 52 | 52 | | to read: 27 |
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| 53 | 53 | | 849.091 Chain letters, pyramid clubs, etc., declared a 28 |
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| 54 | 54 | | lottery; prohibited; penalties. — 29 |
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| 55 | 55 | | (1) The organization of any chain letter club, pyramid 30 |
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| 56 | 56 | | club, or other group organized or brought together under any 31 |
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| 57 | 57 | | plan or device whereby fees or dues or anything of material 32 |
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| 58 | 58 | | value to be paid or given by members thereof are to be paid or 33 |
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| 59 | 59 | | given to any other member thereof, which plan or device includes 34 |
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| 60 | 60 | | any provision for the increase in such membership through a 35 |
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| 61 | 61 | | chain process of new members securing other ne w members and 36 |
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| 62 | 62 | | thereby advancing themselves in the group to a position where 37 |
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| 63 | 63 | | such members in turn receive fees, dues, or things of material 38 |
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| 64 | 64 | | value from other members, is hereby declared to be a lottery, 39 |
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| 65 | 65 | | and whoever shall participate in any such lottery by be coming a 40 |
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| 66 | 66 | | member of, or affiliating with, any such group or organization 41 |
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| 67 | 67 | | or who shall solicit any person for membership or affiliation in 42 |
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| 68 | 68 | | any such group or organization commits a misdemeanor of the 43 |
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| 69 | 69 | | first degree, punishable as provided in s. 775.082 or s. 44 |
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| 70 | 70 | | 775.083. 45 |
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| 71 | 71 | | (2) A "pyramid sales scheme," which is any sales or 46 |
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| 72 | 72 | | marketing plan or operation whereby a person pays a 47 |
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| 73 | 73 | | consideration of any kind, or makes an investment of any kind, 48 |
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| 74 | 74 | | in excess of $100 and acquires the opportunity to receive a 49 |
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| 75 | 75 | | benefit or thing of value which is not primarily contingent on 50 |
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| 83 | 83 | | Page 3 of 9 |
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| 84 | 84 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 88 | 88 | | the volume or quantity of goods, services, or other property 51 |
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| 89 | 89 | | sold in bona fide sales to consumers, and which is related to 52 |
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| 90 | 90 | | the inducement of additional persons, by himself or herself or 53 |
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| 91 | 91 | | others, regardless of numbe r, to participate in the same sales 54 |
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| 92 | 92 | | or marketing plan or operation, is hereby declared to be a 55 |
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| 93 | 93 | | lottery, and whoever shall participate in any such lottery by 56 |
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| 94 | 94 | | becoming a member of or affiliating with, any such group or 57 |
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| 95 | 95 | | organization or who shall solicit any p erson for membership or 58 |
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| 96 | 96 | | affiliation in any such group or organization commits a 59 |
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| 97 | 97 | | misdemeanor of the first degree, punishable as provided in s. 60 |
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| 98 | 98 | | 775.082 or s. 775.083. For purposes of this subsection, the term 61 |
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| 99 | 99 | | "consideration" and the term "investment" do not include the 62 |
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| 100 | 100 | | purchase of goods or services furnished at cost for use in 63 |
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| 101 | 101 | | making sales, but not for resale, or time and effort spent in 64 |
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| 102 | 102 | | the pursuit of sales or recruiting activities. 65 |
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| 103 | 103 | | Section 2. Section 849.0913, Florida Statutes, is created 66 |
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| 104 | 104 | | to read: 67 |
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| 105 | 105 | | 849.0913 Pyramid promotional schemes prohibited; 68 |
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| 106 | 106 | | enforcement; remedies; penalties. - 69 |
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| 107 | 107 | | (1) As used in this section, the term: 70 |
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| 108 | 108 | | (a) "Compensation" means a payment of any money, thing of 71 |
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| 109 | 109 | | value, or financial benefit conferred in return for inducing a 72 |
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| 110 | 110 | | person to participate in a pyramid promotional scheme. 73 |
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| 111 | 111 | | (b) "Consideration" means the payment of money or the 74 |
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| 112 | 112 | | purchase of a product, good, service, or intangible property. 75 |
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| 121 | 121 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 124 | 124 | | |
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| 125 | 125 | | The term does not include the purchase of a product or service 76 |
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| 126 | 126 | | furnished at cost to be used in making a sale and not for resale 77 |
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| 127 | 127 | | or any time and effort spent in pursuit of sales or recruiting 78 |
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| 128 | 128 | | activities. 79 |
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| 129 | 129 | | (c) "Department" means the Department of Legal Affairs. 80 |
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| 130 | 130 | | (d) "Participant" means a person who takes part in a 81 |
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| 131 | 131 | | pyramid promotional scheme. 82 |
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| 132 | 132 | | (e) "Pyramid promotional scheme" means a plan or operation 83 |
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| 133 | 133 | | in which a person pays or gives consideration for the right to 84 |
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| 134 | 134 | | receive compensation that is based on recruiting other persons 85 |
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| 135 | 135 | | into the plan or operation rather than from the sale and 86 |
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| 136 | 136 | | consumption of products, goods, services, or intangible property 87 |
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| 137 | 137 | | by a participant or other person introduced into the plan or 88 |
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| 138 | 138 | | operation. The term includes a plan or operation in which the 89 |
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| 139 | 139 | | number of persons who may participate is limited either 90 |
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| 140 | 140 | | expressly or by the applicatio n of conditions affecting the 91 |
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| 141 | 141 | | eligibility of a person to receive compensation under the plan 92 |
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| 142 | 142 | | or operation, or a plan or operation in which a person, upon 93 |
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| 143 | 143 | | giving consideration, obtains any products, goods, services, or 94 |
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| 144 | 144 | | intangible property in addition to the right to receive 95 |
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| 145 | 145 | | compensation. 96 |
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| 146 | 146 | | (2) A person may not establish, promote, operate, or 97 |
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| 147 | 147 | | participate in a pyramid promotional scheme, even if such 98 |
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| 148 | 148 | | person, upon giving consideration, obtains products, goods, 99 |
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| 149 | 149 | | services, or intangible property in addition to the right to 100 |
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| 157 | 157 | | Page 5 of 9 |
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| 158 | 158 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 162 | 162 | | receive compensation. 101 |
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| 163 | 163 | | (3)(a) This section does not prohibit a plan or operation 102 |
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| 164 | 164 | | in which participants give consideration in return for the right 103 |
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| 165 | 165 | | to receive compensation based on the purchase of products, 104 |
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| 166 | 166 | | goods, services, or intangible property by participants for 105 |
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| 167 | 167 | | personal use, consumption, or resale so long as the plan or 106 |
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| 168 | 168 | | operation: 107 |
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| 169 | 169 | | 1. Does not promote or induce a practice in which a 108 |
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| 170 | 170 | | pyramid promotional scheme requires its independent salesperson 109 |
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| 171 | 171 | | to purchase inventory in an amount exceeding th at which the 110 |
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| 172 | 172 | | salesperson can expect to resell for ultimate consumption or 111 |
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| 173 | 173 | | consumption in a reasonable time period, or both; and 112 |
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| 174 | 174 | | 2. Implements a program in which a plan or operation 113 |
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| 175 | 175 | | repurchases from a salesperson, upon request and pursuant to 114 |
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| 176 | 176 | | commercially reasonable terms, current and marketable inventory 115 |
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| 177 | 177 | | in the possession of the salesperson which was purchased during 116 |
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| 178 | 178 | | his or her business relationship for resale. Such plan or 117 |
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| 179 | 179 | | operation must clearly describe the program in its business 118 |
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| 180 | 180 | | recruiting literature, sales manual, or contract with 119 |
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| 181 | 181 | | independent salespersons, including the disclosure of inventory 120 |
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| 182 | 182 | | that is not eligible for repurchase under the program. 121 |
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| 183 | 183 | | (b) For purposes of this subsection, the term: 122 |
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| 184 | 184 | | 1. "Inventory" includes products, goods, and services, 123 |
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| 185 | 185 | | including company-produced promotional materials, sales aids, 124 |
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| 186 | 186 | | and sales kits that the plan or operation requires independent 125 |
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| 195 | 195 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 196 | 196 | | |
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| 197 | 197 | | |
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| 198 | 198 | | |
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| 199 | 199 | | salespersons to purchase. 126 |
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| 200 | 200 | | 2. "Commercially reasonable terms" means the repurchase of 127 |
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| 201 | 201 | | current and marketable inventory within 12 months after the date 128 |
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| 202 | 202 | | of purchase at not less than 90 percent of the original net 129 |
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| 203 | 203 | | cost, less appropriate setoffs and legal claims, if any. 130 |
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| 204 | 204 | | 3. "Current and marketable inventory" does not include any 131 |
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| 205 | 205 | | inventory that: 132 |
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| 206 | 206 | | a. Is no longer within its commerciall y reasonable use or 133 |
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| 207 | 207 | | shelf-life period; 134 |
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| 208 | 208 | | b. Was clearly described to the salesperson before 135 |
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| 209 | 209 | | purchase as being seasonal, discontinued, or special promotional 136 |
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| 210 | 210 | | goods, products, or services that are not subject to the 137 |
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| 211 | 211 | | inventory repurchase program; or 138 |
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| 212 | 212 | | c. Has been used or opened. 139 |
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| 213 | 213 | | (4)(a) Whenever the department has reason to believe that 140 |
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| 214 | 214 | | a person has been, or is, violating this section, and if it 141 |
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| 215 | 215 | | appears to the department that a cease and desist order against 142 |
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| 216 | 216 | | such person would be in the interest of the public, the 143 |
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| 217 | 217 | | department shall issue and serve upon such person a complaint 144 |
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| 218 | 218 | | and cease and desist order stating its charges in that respect 145 |
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| 219 | 219 | | and containing a notice of a hearing upon a day and at the place 146 |
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| 220 | 220 | | therein fixed at least 15 days after the service of the 147 |
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| 221 | 221 | | complaint. The hearing shall be held in conformity with chapter 148 |
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| 222 | 222 | | 120. 149 |
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| 223 | 223 | | (b) The department may modify or set aside its order at 150 |
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| 232 | 232 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 236 | 236 | | any time by rehearing upon its own motion when such rehearing is 151 |
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| 237 | 237 | | in the interest of the public welfare. 152 |
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| 238 | 238 | | (c) Judicial review of order s of the department shall be 153 |
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| 239 | 239 | | in accordance with s. 120.68 and shall take precedence over 154 |
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| 240 | 240 | | other civil cases pending and shall be expedited in every way. 155 |
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| 241 | 241 | | (d) An order of the department to cease and desist does 156 |
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| 242 | 242 | | not become effective until 10 days after all a dministrative 157 |
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| 243 | 243 | | action has been concluded or, if appeal is made to the district 158 |
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| 244 | 244 | | court of appeal and bond is posted, until a final order has been 159 |
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| 245 | 245 | | entered by that court. 160 |
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| 246 | 246 | | (e) A cease and desist order may not act as a limitation 161 |
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| 247 | 247 | | upon any other action or remedy available. 162 |
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| 248 | 248 | | (f) When a court remands an order of the department for 163 |
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| 249 | 249 | | rehearing, such rehearing must be held within 45 days after the 164 |
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| 250 | 250 | | remand. 165 |
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| 251 | 251 | | (g) Any person who violates a cease and desist order of 166 |
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| 252 | 252 | | the department after it has become final and while such order is 167 |
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| 253 | 253 | | in effect shall forfeit and pay to the state a civil penalty of 168 |
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| 254 | 254 | | up to $10,000 for each violation which shall accrue to the state 169 |
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| 255 | 255 | | and may be recovered in a civil action brought by the state. 170 |
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| 256 | 256 | | Each separate violation of such an order shall be a separ ate 171 |
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| 257 | 257 | | offense, except that in the case of a violation through 172 |
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| 258 | 258 | | continuing failure or neglect to obey a final order of the 173 |
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| 259 | 259 | | department, each day of continuance of such failure or neglect 174 |
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| 260 | 260 | | shall be deemed a separate offense. 175 |
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| 269 | 269 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 270 | 270 | | |
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| 272 | 272 | | |
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| 273 | 273 | | (5)(a) Whenever the department has r eason to believe that 176 |
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| 274 | 274 | | a person has been, or is, violating this section, the person 177 |
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| 275 | 275 | | must be prosecuted by the department in accordance with s. 178 |
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| 276 | 276 | | 16.56. 179 |
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| 277 | 277 | | (b) Any person who is convicted of establishing, 180 |
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| 278 | 278 | | promoting, or operating a pyramid promotional scheme is guilty 181 |
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| 279 | 279 | | of a felony of the third degree, punishable as provided in s. 182 |
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| 280 | 280 | | 775.082, s. 775.083, or s. 775.084. 183 |
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| 281 | 281 | | (c) Any person who is convicted of participating in a 184 |
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| 282 | 282 | | pyramid promotional scheme is guilty of a misdemeanor of the 185 |
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| 283 | 283 | | first degree, punishable as provid ed in s. 775.082 or s. 186 |
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| 284 | 284 | | 775.083. 187 |
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| 285 | 285 | | (d) When a person is convicted of an offense under this 188 |
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| 286 | 286 | | section, the court, pursuant to s. 775.089, shall order the 189 |
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| 287 | 287 | | person to pay restitution to the victim of the offense. In 190 |
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| 288 | 288 | | determining the value of the property loss, the court shall 191 |
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| 289 | 289 | | include expenses incurred in the investigation or prosecution of 192 |
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| 290 | 290 | | the offense as well as the disgorgement of any profits realized 193 |
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| 291 | 291 | | by a person convicted of the offense. 194 |
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| 292 | 292 | | (6)(a) In addition to the remedies provided in this 195 |
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| 293 | 293 | | section, the departmen t may apply to any circuit court of this 196 |
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| 294 | 294 | | state for the issuance of a temporary or permanent injunction, 197 |
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| 295 | 295 | | or both, for the purpose of enforcing this section. In any such 198 |
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| 296 | 296 | | action, an order or judgment may be entered awarding such 199 |
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| 297 | 297 | | temporary or permanent injunct ion as may be deemed proper. Such 200 |
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| 306 | 306 | | F L O R I D A H O U S E O F R E P R E S E N T A T I V E S |
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| 307 | 307 | | |
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| 308 | 308 | | |
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| 309 | 309 | | |
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| 310 | 310 | | injunction must be issued without bond. A single act in 201 |
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| 311 | 311 | | violation of this section is sufficient to authorize the 202 |
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| 312 | 312 | | issuance of an injunction. 203 |
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| 313 | 313 | | (b) In addition to all other means provided by law for the 204 |
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| 314 | 314 | | enforcement of an inj unction, the court in which such action is 205 |
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| 315 | 315 | | brought shall have power and jurisdiction to appoint one or more 206 |
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| 316 | 316 | | receivers for the property and business of a person who has 207 |
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| 317 | 317 | | been, or is, violating this section, including books, papers, 208 |
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| 318 | 318 | | documents, and records per taining thereto, or as much thereof as 209 |
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| 319 | 319 | | the court may deem reasonably necessary to prevent violations of 210 |
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| 320 | 320 | | the law or injury to the public through, or by means of, the use 211 |
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| 321 | 321 | | of such property and business. The receiver, when so appointed 212 |
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| 322 | 322 | | and qualified, shall hav e such powers and duties as to custody, 213 |
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| 323 | 323 | | collection, administration, winding up, and liquidation of such 214 |
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| 324 | 324 | | property and business as is, from time to time, conferred upon 215 |
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| 325 | 325 | | him or her by the court. In any such action, the court may issue 216 |
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| 326 | 326 | | an order staying all pen ding civil actions and the court, in its 217 |
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| 327 | 327 | | discretion, may require that all civil actions be assigned to 218 |
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| 328 | 328 | | the circuit court judge who appointed the receiver. 219 |
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| 329 | 329 | | (7) The provisions and penalties set forth in this section 220 |
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| 330 | 330 | | are in addition to any other civil, admi nistrative, or criminal 221 |
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| 331 | 331 | | action provided by law. 222 |
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| 332 | 332 | | Section 3. This act shall take effect July 1, 2025. 223 |
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