Senate Bill 712 (2026) — Prohibition of pyramid promotional schemes
SB 712
Florida Bills
Florida Senate - 2026 SB 712 By Senator Yarborough 4-01047-26 2026712__ Page 1 of 8 CODING: Words stricken are deletions; words underlined are additions. A bill to be entitled 1
An act relating to the prohibition of pyramid 2 promotional schemes; providing a
short title; amending 3 s. 849.091, F.S.; deleting provisions relating to 4 pyramid sales schemes; creating s. 849.0913, F.S.; 5 defining terms; prohibiting a person from 6 establishing, promoting, operating, or participating 7 in a pyramid promotional scheme; providing 8 construction; requiring the Department of Legal 9 Affairs to issue and serve a complaint and cease and 10 desist order in certain instances; establishing 11 procedures for cease and desist orders; providing 12 penalties; providing for restitution; authorizing the 13 department to apply for an injunction; providing 14 requirements for an injunction; authorizing the court 15 to appoint a receiver; providing for the powers and 16 duties of such receivership; authorizing the court to 17 issue an order to stay certain actions and requiring 18 such actions be assigned to the judge who appointed 19 the receiver; providing that specified provisions and 20 penalties are in addition to civil, administrative, or 21 criminal actions provided by law; providing an 22 effective date. 23 24 Be It Enacted by the Legislature of the State of Florida: 25 26
Section 1. This act may be cited as the “Direct Sales 27 Consumer Protection Act.” 28
Section
Section 849.091, Florida Statutes, is amended to 29
Florida Senate - 2026 SB 712 4-01047-26 2026712__ Page 2 of 8 CODING: Words stricken are deletions; words underlined are additions. read: 30 849.091 Chain letters, pyramid clubs, etc., declared a 31 lottery; prohibited; penalties.— 32
(1) The organization of any chain letter club, pyramid 33 club, or other group organized or brought together under any 34 plan or device whereby fees or dues or anything of material 35 value to be paid or given by members thereof are to be paid or 36 given to any other member thereof, which plan or device includes 37 any provision for the increase in such membership through a 38 chain process of new members securing other new members and 39 thereby advancing themselves in the group to a position where 40 such members in turn receive fees, dues, or things of material 41 value from other members, is hereby declared to be a lottery, 42 and whoever shall participate in any such lottery by becoming a 43 member of, or affiliating with, any such group or organization 44 or who shall solicit any person for membership or affiliation in 45 any such group or organization commits a misdemeanor of the 46 first degree, punishable as provided in s. 775.082 or s. 47 775.083. 48
(2) A “pyramid sales scheme,” which is any sales or 49 marketing plan or operation whereby a person pays a 50 consideration of any kind, or makes an investment of any kind, 51 in excess of $100 and acquires the opportunity to receive a 52 benefit or thing of value which is not primarily contingent on 53 the volume or quantity of goods, services, or other property 54 sold in bona fide sales to consumers, and which is related to 55 the inducement of additional persons, by himself or herself or 56 others, regardless of number, to participate in the same sales 57 or marketing plan or operation, is hereby declared to be a 58
Florida Senate - 2026 SB 712 4-01047-26 2026712__ Page 3 of 8 CODING: Words stricken are deletions; words underlined are additions. lottery, and whoever shall participate in any such lottery by 59 becoming a member of or affiliating with, any such group or 60 organization or who shall solicit any person for membership or 61 affiliation in any such group or organization commits a 62 misdemeanor of the first degree, punishable as provided in s. 63 775.082 or s. 775.083.
For purposes of this subsection, the term 64 “consideration” and the term “investment” do not include the 65 purchase of goods or services furnished at cost for use in 66 making sales, but not for resale, or time and effort spent in 67 the pursuit of sales or recruiting activities. 68
Section
Section 849.0913, Florida Statutes, is created 69 to read: 70 849.0913 Pyramid promotional schemes prohibited; 71 enforcement; remedies; penalties.— 72
(1) As used in this section, the term: 73 (a) “Compensation” means a payment of any money, thing of 74 value, or financial benefit conferred in return for inducing a 75 person to participate in a pyramid promotional scheme. 76 (b) “Consideration” means the payment of money or the 77 purchase of a product, good, service, or intangible property. 78 The term does not include the purchase of a product or service 79 furnished at cost to be used in making a sale and not for resale 80 or any time and effort spent in pursuit of sales or recruiting 81 activities. 82 (c) “Department” means the Department of Legal Affairs. 83 (d) “Participant” means a person who takes
part in a 84 pyramid promotional scheme. 85 (e) “Pyramid promotional scheme” means a plan or an 86 operation in which a person pays or gives consideration for the 87
Florida Senate - 2026 SB 712 4-01047-26 2026712__ Page 4 of 8 CODING: Words stricken are deletions; words underlined are additions. right to receive compensation based on recruiting other persons 88 into the plan or operation rather than from the sale and 89 consumption of products, goods, services, or intangible property 90 by a participant or other person introduced into the plan or 91 operation.
The term includes a plan or an operation in which the 92 number of persons who may participate is limited either 93 expressly or by the application of conditions affecting the 94 eligibility of a person to receive compensation under the plan 95 or operation, or a plan or an operation in which a person, upon 96 giving consideration, obtains any products, goods, services, or 97 intangible property in addition to the right to receive 98 compensation. 99
(2) A person may not establish, promote, operate, or 100 participate in a pyramid promotional scheme, even if such 101 person, upon giving consideration, obtains products, goods, 102 services, or intangible property in addition to the right to 103 receive compensation. 104 (3)(
a) This
section does not prohibit a plan or an 105 operation in which participants give consideration in return for 106 the right to receive compensation based on the purchase of 107 products, goods, services, or intangible property by 108 participants for personal use, consumption, or resale so long as 109 the plan or operation: 110 1. Does not promote or induce a practice in which a pyramid 111 promotional scheme requires its independent salesperson to 112 purchase inventory in an amount exceeding that which the 113 salesperson can expect to resell for ultimate consumption or 114 consumption in a reasonable time period, or both; and 115 2. Implements a program in which a plan or an operation 116
Florida Senate - 2026 SB 712 4-01047-26 2026712__ Page 5 of 8 CODING: Words stricken are deletions; words underlined are additions. repurchases from a salesperson, upon request and pursuant to 117 commercially reasonable terms, current and marketable inventory 118 in the possession of the salesperson which was purchased during 119 his or her business relationship for resale. Such plan or 120 operation must clearly describe the program in its business 121 recruiting literature, sales manual, or contract with 122 independent salespersons, including the disclosure of inventory 123 that is not eligible for repurchase under the program. 124 (
b) For purposes of this subsection, the term: 125 1. “Commercially reasonable terms” means the repurchase of 126 current and marketable inventory within 12 months after the date 127 of purchase at not less than 90 percent of the original net 128 cost, less appropriate setoffs and legal claims, if any. 129 2. “Current and marketable inventory” does not include any 130 inventory that: 131 a. Is no longer within its commercially reasonable use or 132 shelf-life period; 133 b.
Was clearly described to the salesperson before purchase 134 as being seasonal, discontinued, or special promotional goods, 135 products, or services that are not subject to the inventory 136 repurchase program; or 137 c. Has been used or opened. 138 3. “Inventory” includes products, goods, and services, 139 including company-produced promotional materials, sales aids, 140 and sales kits that the plan or operation requires independent 141 salespersons to purchase. 142 (4)(
a) Whenever the department has reason to believe that a 143 person has been, or is, violating this section, and if it 144 appears to the department that a cease and desist order against 145
Florida Senate - 2026 SB 712 4-01047-26 2026712__ Page 6 of 8 CODING: Words stricken are deletions; words underlined are additions. such person would be in the interest of the public, the 146 department shall issue and serve upon such person a complaint 147 and cease and desist order stating its charges in that respect 148 and containing a notice of a hearing upon a day and at the place 149 therein fixed at least 15 days after the service of the 150 complaint. The hearing shall be held in conformity with
chapter 151 120. 152 (
b) The department may modify or set aside its order at any 153 time by rehearing upon its own motion when such rehearing is in 154 the interest of the public welfare. 155 (
c) Judicial review of orders of the department must be in 156 accordance with s. 120.68, take precedence over other civil 157 cases pending, and be expedited in every way. 158 (
d) An order of the department to cease and desist does not 159 become effective until 10 days after all administrative action 160 has been concluded or, if an appeal is made to the district 161 court of appeal and bond is posted, until a final order has been 162 entered by that court. 163 (
e) A cease and desist order may not act as a limitation 164 upon any other action or remedy available. 165 (
f) When a court remands an order of the department for 166 rehearing, such rehearing must be held within 45 days after the 167 remand. 168 (
g) A person who violates a cease and desist order of the 169 department after it has become final and while such order is in 170 effect shall forfeit and pay to the state a civil penalty of up 171 to $10,000 for each violation which shall accrue to the state 172 and may be recovered in a civil action brought by the state. 173 Each separate violation of such an order is a separate offense, 174
Florida Senate - 2026 SB 712 4-01047-26 2026712__ Page 7 of 8 CODING: Words stricken are deletions; words underlined are additions. except that in the case of a violation through continuing 175 failure or neglect to obey a final order of the department, each 176 day of continuance of such failure or neglect is deemed a 177 separate offense. 178 (5)(
a) Whenever the department has reason to believe that a 179 person has been, or is, violating this section, the person must 180 be prosecuted by the department in accordance with s. 16.56. 181 (
b) A person who is convicted of establishing, promoting, 182 or operating a pyramid promotional scheme commits a felony of 183 the third degree, punishable as provided in s. 775.082, s. 184 775.083, or s. 775.084. 185 (
c) A person who is convicted of participating in a pyramid 186 promotional scheme commits a misdemeanor of the first degree, 187 punishable as provided in s. 775.082 or s. 775.083. 188 (
d) When a person is convicted of an offense under this 189 section, the court, pursuant to s. 775.089, shall order the 190 person to pay restitution to the victim or victims of the 191 offense. In determining the value of the property loss, the 192 court shall include expenses incurred in the investigation or 193 prosecution of the offense as well as the disgorgement of any 194 profits realized by a person convicted of the offense. 195 (6)(
a) In addition to the remedies provided in this 196 section, the department may apply to any circuit court of this 197 state for the issuance of a temporary or permanent injunction, 198 or both, for the purpose of enforcing this section. In any such 199 action, an order or a judgment may be entered awarding such 200 temporary or permanent injunction as may be deemed proper. Such 201 injunction must be issued without bond. A single act in 202 violation of this
section is sufficient to authorize the 203
Florida Senate - 2026 SB 712 4-01047-26 2026712__ Page 8 of 8 CODING: Words stricken are deletions; words underlined are additions. issuance of an injunction. 204 (
b) In addition to all other means provided by law for the 205 enforcement of an injunction, the court in which such action is 206 brought shall have power and jurisdiction to appoint one or more 207 receivers for the property and business of a person who has 208 been, or is, violating this section, including books, papers, 209 documents, and records pertaining thereto, or as much thereof as 210 the court may deem reasonably necessary to prevent violations of 211 the law or injury to the public through, or by means of, the use 212 of such property and business.
The receiver, when so appointed 213 and qualified, shall have such powers and duties as to custody, 214 collection, administration, winding up, and liquidation of such 215 property and business as is, from time to time, conferred upon 216 him or her by the court. In any such action, the court may issue 217 an order staying all pending civil actions and the court, in its 218 discretion, may require that all civil actions be assigned to 219 the circuit court judge who appointed the receiver. 220
(7) The provisions and penalties set forth in this