I 
114TH CONGRESS 
2D SESSION 
H. R. 5230 
To prohibit pyramid promotional schemes, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 13, 2016 
Mrs. BLACKBURN (for herself and Mr. VEASEY) introduced the following bill; 
which was referred to the Committee on Energy and Commerce 
A BILL 
To prohibit pyramid promotional schemes, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Anti-Pyramid Pro-
motional Scheme Act of 2016’’. 
SEC. 
2. 
PROHIBITION 
ON 
PYRAMID 
PROMOTIONAL 
SCHEMES. 
(a) IN GENERAL.—It shall be unlawful for any per-
son to establish, operate, promote or cause to be promoted 
a pyramid promotional scheme. 
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(b) ENFORCEMENT BY THE FEDERAL TRADE COM-
MISSION.—A violation of subsection (a) shall be treated 
as an unfair or deceptive act or practice in or affecting 
commerce under section 5 of the Federal Trade Commis-
sion Act (15 U.S.C. 45). The Federal Trade Commission 
shall enforce such subsection in the same manner, by the 
same means, and with the same jurisdiction, powers, and 
duties as though all applicable terms and provisions of the 
Federal Trade Commission Act (15 U.S.C. 41 et seq.) 
were incorporated into and made a part of this Act. 
SEC. 3. DEFINITIONS. 
As used in this Act: 
(1) APPROPRIATE
INVENTORY
REPURCHASE 
AGREEMENT.—The term ‘‘appropriate inventory 
purchase agreement’’ means a program by which a 
plan or operation repurchases, upon request at the 
termination of a participant’s business relationship 
with the plan or operation and based upon commer-
cially reasonable terms, current and marketable in-
ventory purchased and maintained by the participant 
for resale, use, or consumption, and such plan or op-
eration in its recruiting literature, sales manual, and 
contracts with participants, including the manner in 
which the repurchase is exercised, and disclosure of 
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any inventory that is not eligible for repurchase 
under the program. 
(2) COMMERCIALLY REASONABLE TERMS.—The 
term ‘‘commercially reasonable terms’’ means the re-
purchase of current and marketable inventory within 
12 months from the date of purchase at not less 
than 90 percent of the original net cost to the par-
ticipant, less appropriate set-offs and legal claims, if 
any. 
(3) COMPENSATION.—The term ‘‘compensa-
tion’’ means the payment of any money, thing of 
value, financial benefits, or position within the plan 
or operation; 
(4) CONSIDERATION.—The term ‘‘consider-
ation’’— 
(A) means the payment of money or an-
other thing of value or the purchase of a prod-
uct, good, service, intangible property; and 
(B) does not include— 
(i) the purchase of a product fur-
nished at cost to be used in making a sale 
and not for resale; or 
(ii) any time and effort spent in pur-
suit of sales or recruiting activities. 
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