Florida Senate - 2025 SB 660 By Senator Burton 12-01106-25 2025660__ 1 A bill to be entitled 2 An act relating to the prohibition of pyramid 3 promotional schemes; amending s. 849.091, F.S.; 4 deleting a provision relating to pyramid sales 5 schemes; creating s. 849.0913, F.S.; defining terms; 6 prohibiting a person from establishing, promoting, 7 operating, or participating in a pyramid promotional 8 scheme; providing construction; defining the terms 9 inventory, commercially reasonable terms, and 10 current and marketable inventory; requiring the 11 Department of Legal Affairs to issue and serve a 12 complaint and cease and desist order under certain 13 circumstances; establishing procedures for such cease 14 and desist orders; authorizing the department to 15 modify or set aside its cease and desist order at any 16 time by rehearing when it is in the interest of the 17 public welfare; requiring that such orders be in 18 compliance with the rules of judicial review; 19 requiring that such judicial reviews take precedence 20 over other pending civil cases; providing that such 21 orders do not become effective until a specific 22 timeframe lapses or a final order has been entered by 23 a certain court; prohibiting cease and desist orders 24 from acting as a limitation upon any other action or 25 remedy available; requiring the department to hold a 26 rehearing of such orders within a specified timeframe 27 after a court remands such orders to the department; 28 requiring the department, with the Office of Statewide 29 Prosecution, to prosecute persons believed to be 30 participating in a pyramid promotional scheme; 31 providing civil and criminal penalties; providing for 32 restitution; requiring the court, in determining the 33 value of property loss, to consider certain expenses 34 from prosecuting such persons and any profits realized 35 in such pyramid promotional schemes; authorizing the 36 department to apply for an injunction under certain 37 circumstances; providing requirements for such 38 injunction; authorizing the court to appoint 39 receivers; providing for the powers and duties of such 40 receivers; authorizing the court to stay certain civil 41 actions and require that such actions be assigned to 42 the court that appointed the receiver; providing that 43 specified provisions and penalties are in addition to 44 civil, administrative, or criminal actions provided by 45 law; providing an effective date. 46 47 Be It Enacted by the Legislature of the State of Florida: 48 49 Section 1.Section 849.091, Florida Statutes, is amended to 50 read: 51 849.091Chain letters, pyramid clubs, etc., declared a 52 lottery; prohibited; penalties. 53 (1)The organization of any chain letter club, pyramid 54 club, or other group organized or brought together under any 55 plan or device whereby fees or dues or anything of material 56 value to be paid or given by members thereof are to be paid or 57 given to any other member thereof, which plan or device includes 58 any provision for the increase in such membership through a 59 chain process of new members securing other new members and 60 thereby advancing themselves in the group to a position where 61 such members in turn receive fees, dues, or things of material 62 value from other members, is hereby declared to be a lottery, 63 and whoever participates shall participate in any such lottery 64 by becoming a member of, or affiliating with, any such group or 65 organization or who solicits shall solicit any person for 66 membership or affiliation in any such group or organization 67 commits a misdemeanor of the first degree, punishable as 68 provided in s. 775.082 or s. 775.083. 69 (2)A pyramid sales scheme, which is any sales or 70 marketing plan or operation whereby a person pays a 71 consideration of any kind, or makes an investment of any kind, 72 in excess of $100 and acquires the opportunity to receive a 73 benefit or thing of value which is not primarily contingent on 74 the volume or quantity of goods, services, or other property 75 sold in bona fide sales to consumers, and which is related to 76 the inducement of additional persons, by himself or herself or 77 others, regardless of number, to participate in the same sales 78 or marketing plan or operation, is hereby declared to be a 79 lottery, and whoever shall participate in any such lottery by 80 becoming a member of or affiliating with, any such group or 81 organization or who shall solicit any person for membership or 82 affiliation in any such group or organization commits a 83 misdemeanor of the first degree, punishable as provided in s. 84 775.082 or s. 775.083. For purposes of this subsection, the term 85 consideration and the term investment do not include the 86 purchase of goods or services furnished at cost for use in 87 making sales, but not for resale, or time and effort spent in 88 the pursuit of sales or recruiting activities. 89 Section 2.Section 849.0913, Florida Statutes, is created 90 to read: 91 849.0913Pyramid promotional schemes prohibited; 92 enforcement; remedies; penalties. 93 (1)As used in this section, the term: 94 (a)Compensation means a payment of any money, thing of 95 value, or financial benefit conferred in return for inducing a 96 person to participate in a pyramid promotional scheme. 97 (b)Consideration means the payment of money or the 98 purchase of a product, good, service, or intangible property. 99 The term does not include the purchase of a product or service 100 furnished at cost to be used in making a sale and not for resale 101 or any time and effort spent in pursuit of sales or recruiting 102 activities. 103 (c)Department means the Department of Legal Affairs. 104 (d)Participant means a person who takes part in a 105 pyramid promotional scheme. 106 (e)Pyramid promotional scheme means a plan or operation 107 in which a person pays or gives consideration for the right to 108 receive compensation that is based on recruiting other persons 109 into the plan or operation rather than from the sale and 110 consumption of products, goods, services, or intangible property 111 by a participant or other person introduced into the plan or 112 operation. The term includes a plan or an operation in which the 113 number of persons who may participate is limited either 114 expressly or by the application of conditions affecting the 115 eligibility of a person to receive compensation under the plan 116 or operation, or a plan or an operation in which a person, upon 117 giving consideration, obtains any products, goods, services, or 118 intangible property in addition to the right to receive 119 compensation. 120 (2)A person may not establish, promote, operate, or 121 participate in a pyramid promotional scheme, even if such 122 person, upon giving consideration, obtains products, goods, 123 services, or intangible property in addition to the right to 124 receive compensation. 125 (3)(a)This section does not prohibit a plan or an 126 operation in which participants give consideration in return for 127 the right to receive compensation based on the purchase of 128 products, goods, services, or intangible property by 129 participants for personal use, consumption, or resale so long as 130 the plan or operation: 131 1.Does not promote or induce a practice in which a pyramid 132 promotional scheme requires its independent salesperson to 133 purchase inventory in an amount exceeding that which the 134 salesperson can expect to resell for ultimate consumption or 135 consumption in a reasonable time period, or both; and 136 2.Implements a program in which a plan or an operation 137 repurchases from a salesperson, upon request and pursuant to 138 commercially reasonable terms, current and marketable inventory 139 in the possession of the salesperson which was purchased during 140 his or her business relationship for resale. Such plan or 141 operation must clearly describe the program in its business 142 recruiting literature, sales manual, or contract with 143 independent salespersons, including the disclosure of inventory 144 that is not eligible for repurchase under the program. 145 (b)For purposes of this subsection, the term: 146 1.Inventory includes products, goods, and services, 147 including company-produced promotional materials, sales aids, 148 and sales kits that the plan or operation requires independent 149 salespersons to purchase. 150 2.Commercially reasonable terms means the repurchase of 151 current and marketable inventory within 12 months after the date 152 of purchase at not less than 90 percent of the original net 153 cost, less appropriate setoffs and legal claims, if any. 154 3.Current and marketable inventory does not include any 155 inventory that: 156 a.Is no longer within its commercially reasonable use or 157 shelf-life period; 158 b.Was clearly described to the salesperson before purchase 159 as being seasonal, discontinued, or special promotional goods, 160 products, or services that are not subject to the inventory 161 repurchase program; or 162 c.Has been used or opened. 163 (4)(a)If the department has reason to believe that a 164 person has been, or is, violating this section, and if it 165 appears to the department that a cease and desist order against 166 such person would be in the interest of the public welfare, the 167 department must issue and serve upon such person a complaint and 168 a cease and desist order stating its charges and containing a 169 notice of a hearing upon a day and at the place therein fixed at 170 least 15 days after the service of the complaint. The hearing 171 must be held in conformity with chapter 120. 172 (b)The department may modify or set aside its cease and 173 desist order at any time by rehearing upon its own motion when 174 such rehearing is in the interest of the public welfare. 175 (c)Judicial review of orders of the department must be in 176 accordance with s. 120.68, must take precedence over other civil 177 cases pending, and must be expedited in every way. 178 (d)An order of the department to cease and desist does not 179 become effective until 10 days after all administrative action 180 has been concluded or, if appeal is made to the district court 181 of appeal and bond is posted, until a final order has been 182 entered by that court. 183 (e)A cease and desist order may not act as a limitation 184 upon any other action or remedy available. 185 (f)When a court remands an order of the department for 186 rehearing, such rehearing must be held within 45 days after the 187 remand. 188 (g)A person who violates a cease and desist order of the 189 department after it has become final, and while such order is in 190 effect, forfeits and must pay to the state a civil penalty of up 191 to $10,000 for each violation that accrues to the state and that 192 may be recovered in a civil action brought by the state. Each 193 separate violation of such an order is a separate offense, 194 except that in the case of a violation through continuing 195 failure or neglect to obey a final order of the department, each 196 day of continuance of such failure or neglect is deemed a 197 separate offense. 198 (5)(a)If the department has reason to believe that a 199 person has been, or is, violating this section, the person must 200 be prosecuted by the department in accordance with s. 16.56. 201 (b)A person who is convicted of establishing, promoting, 202 or operating a pyramid promotional scheme commits a felony of 203 the third degree, punishable as provided in s. 775.082, s. 204 775.083, or s. 775.084. 205 (c)A person who is convicted of participating in a pyramid 206 promotional scheme commits a misdemeanor of the first degree, 207 punishable as provided in s. 775.082 or s. 775.083. 208 (d)If a person is convicted of an offense under this 209 section, the court must, pursuant to s. 775.089, order the 210 person to pay restitution to the victim of the offense. In 211 determining the value of the property loss, the court shall 212 include any expenses incurred in the investigation or 213 prosecution of the offense as well as the disgorgement of any 214 profits realized by a person convicted of the offense. 215 (6)(a)In addition to the remedies provided in this 216 section, the department may apply to any circuit court of this 217 state for the issuance of a temporary or permanent injunction, 218 or both, for the purpose of enforcing this section. In any such 219 action, an order or judgment may be entered awarding such 220 temporary or permanent injunction as may be deemed proper. Such 221 injunction must be issued without bond. A single act in 222 violation of this section is sufficient to authorize the 223 issuance of an injunction. 224 (b)In addition to all other means provided by law for the 225 enforcement of an injunction, the court in which such action is 226 brought shall have power and jurisdiction to appoint one or more 227 receivers for the property and business of a person who violates 228 this section, including books, papers, documents, and records 229 pertaining thereto, or as much thereof as the court may deem 230 reasonably necessary to prevent violations of the law or injury 231 to the public through, or by means of, the use of such property 232 and business. The receiver shall have such powers and duties as 233 to custody, collection, administration, winding up, and 234 liquidation of such property and business as is conferred upon 235 him or her by the court. In any such action, the court may issue 236 an order staying all pending civil actions and may require that 237 all civil actions be assigned to the circuit court judge who 238 appointed the receiver. 239 (7)The provisions and penalties set forth in this section 240 are in addition to any other civil, administrative, or criminal 241 action provided by law. 242 Section 3.This act shall take effect July 1, 2025.