COLUMBUS – State Representative Dorothy Pelanda (R-Marysville) has introduced HB 329, legislation designed to strengthen consumer protection and protect the public from pyramid schemes.

“House Bill 329 will enhance Ohio’s existing laws by drawing a clear line of delineation between direct selling companies and pyramid schemes,” Pelanda stated. “The lack of a clear pyramid scheme law in statute may create confusion among the public, particularly when considering that some masquerade as legitimate direct selling companies to defraud consumers. Not only will this legislation protect the public from these schemes, but it will guide legitimate direct selling companies as to what constitutes acceptable business practices.”

The Council of State Governments (CSG) adopted similar language into its 2004 Volume of Suggested State Legislation, based on a 2003 South Dakota law. Since then, eleven other states including Indiana, Tennessee, and Virginia have moved to update their laws.

Specifically, HB 329 will provide clarity and eliminate confusion in the marketplace by:

• Clarifying enforcement while enacting a law that will protect legitimate Ohio sellers.
• Clearly differentiating the legal income earning opportunities offered by legitimate direct selling companies from the frauds perpetrated by promoters of pyramid schemes.
• Establishing it as a legitimate business practice, not evidence of a pyramid scheme, when participants purchase reasonable amounts of product for their own use.

“I look forward to working with all interested parties on this legislation as it begins the committee process this fall,” Pelanda added.

A copy of HB 329 is attached.

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