Bill > HB162

This bill amends Delaware law to establish comprehensive regulations for multilevel distribution companies (MLDCs), which are businesses that sell products through independent agents at different levels and pay compensation based on sales or recruitment. The bill defines key terms and mandates specific disclosure requirements for these companies, including a detailed written document that must be provided to potential participants before any financial commitment. This document must clearly outline the company's compensation plan, training offerings, services, potential earnings (with a required disclaimer that earnings are not guaranteed), and other critical details. The bill prohibits MLDCs from requiring participants to purchase goods or services without offering a repurchase option, and establishes a mandatory cancellation policy allowing participants to exit the program within three months and receive at least 90% of their initial investment back. Furthermore, the legislation creates a private right of action for participants who suffer damage from violations, enabling them to recover treble damages, court costs, and attorney's fees. The bill explicitly excludes certain professional licensees like insurance and real estate agents from these regulations, focusing instead on protecting participants in multilevel marketing programs from potential predatory practices.

Business and Industry

https://legis.delaware.gov/BillDetail?LegislationId=142291