SB164 Summary

• Amends Alabama Code Sections 8-19-3 and 8-19-5 to strengthen prohibitions against pyramid sales structures and deceptive trade practices.

• Adds definitions for "bona fide inventory repurchase program," "inventory loading," and "pyramid promotional scheme" to clarify what constitutes illegal pyramid schemes.

• Requires legitimate multi-level marketing operations to implement bona fide inventory repurchase programs that buy back current and marketable inventory within 12 months at not less than 90 percent of original net cost.

• Prohibits inventory loading (requiring salespeople to purchase excessive inventory) and requires clear disclosure of inventory exclusions and repurchase terms in recruiting materials and contracts.

• Effective the first day of the third month following passage and approval by the Governor.