If you're one of the millions of people who use or sell products from companies like Amway or Mary Kay, this new legislation could help you.
There is proposed bi-partisan legislation that would protect consumers from illegal pyramid schemes.
This bill is meant to protect consumers and support independent distributors that rely on direct sales for extra income. The proposal is similar to ones already adopted in several other states.
On Tuesday morning March 20, representatives from companies like Mary Kay, Nu Skin, Amway and ACN spoke in favor of House Bill 5726 in the Committee on Commerce and Trade.
The legislation defines and bans illegal pyramid promotional schemes and establishes penalties for operating one. It defines an illegal pyramid scheme as a plan offering participants compensation for recruiting others without regard to sales. It also lays out a reasonable repurchase program when the salesperson's business relationship with the company ends.
A representative from Mary Kay testified, “The industry has been adversely impacted, and I don't mean the company. I mean our individual beauty consultants by illegal pyramid schemes that are out there basically selling something that is not beneficial to the beauty consultants or the consumer.”
The direct selling legislation was also introduced to Michigan Attorney General Bill Schuette, since his office would be the one to enforce any changes. It will now go back to the Committee on Commerce and Trade for more discussion.
That won't happen until after the Easter break. From there, it could be a while before it's presented to the full House. If passed, Michigan would be the twenty-second state to pass similar legislation.
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