SEA 283 Summary

• Creates new Article 13 (IC 24-13) establishing separate comprehensive regulations for pyramid promotional schemes, effective July 1, 2017, removing related provisions from existing deceptive consumer sales law.

• Prohibits any person from establishing, promoting, or operating pyramid promotional schemes, defined as plans where compensation derives primarily from recruiting participants rather than from actual sales and consumption of goods or services.

• Authorizes the Attorney General to issue cease and desist orders, bring enforcement actions, impose civil penalties up to $10,000 per violation, and seek injunctions, restitution, and receiver appointments.

• Establishes private right of action allowing consumers to sue pyramid scheme operators for actual damages or $1,000 (whichever is greater), with courts able to increase damages up to three times actual damages or $3,000, including class action provisions.

• Creates exemption for legitimate direct sales operations that implement appropriate inventory repurchase programs (repurchasing current inventory at 90% of original cost within 12 months) and do not promote inventory loading, placing burden on the plan to prove compensation derives from actual product sales.