Published on May 19th, 2016 | by Bonnie Patten


Does this New Federal Bill Promote Pyramid Schemes?

The Congressional Committee on Energy and Commerce is reviewing a bill concerning pyramid schemes (H.R. 5230) that was introduced in the House of Representatives last week. Proponents of the bill claim that it will provide greater clarity to consumers and direct selling companies as to what is and what is not a pyramid scheme. But I simply don’t think that’s the case. First, when it comes to protecting consumers from pyramid schemes, the bill appears to do more harm than good. Second, a lot of ambiguous terms are used in this bill. For example, what does “original net cost” mean, or “marketable inventory,” and who gets to determine things like “appropriate set-offs” and what makes a set-off “appropriate”?

After hours of analysis and consultation with world-renowned pyramid scheme experts, was able to shave down the layers of legalese and obfuscation contained in this bill and whittle it down to its essence. Below is our best take on what the drafters of this bill were really trying to say. Check back for further updates.

H.B.5230: The Pro-Pyramid Scheme Bill

Print Friendly, PDF & Email


About the Author

Bonnie, executive director of, is an attorney and mother of three. Her commitment to educating the public about deceptive marketing stems from her belief that education is the only viable way to effectively eradicate the market for false ads.

One Response to Does this New Federal Bill Promote Pyramid Schemes?

  1. Ken K. says:

    º0³ Δ∞8Melaleuca CEO Frank VanderSloot Denies to Lead a MLM Company –

    ” It is my belief, “Frank VanderSloot’s Melaleuca inc., is a illegal pyramid scheme.I’m calling on our federal government for unbiased judicial review and protections, ‘ Summary of penalties sanctions and terminations actions as well as new consumer protection laws. (250m500m+)=( (cozyAG) Δ∞8 Yes, As I See It!

    Here’s what Melaleuca is AS I SEE IT!

    If participants must recruit and buy products to be successful, or if the pay plan’s primary rewards are for building a downline, it should be considered a recruitment-driven MLM, and hence an illegal pyramid scheme. √≡ Melaleuca “NoRecruitNoPay™

    √Recruitment-driven MLM – an MLM with a compensation plan that rewards primarily distributors who recruit huge downlines, and is therefore a product-based pyramid scheme. Updates blogged here ~> My motivation? (1)Consumer Protection.

    (2) Common law. (3)Constitutional law. (4) A Reckoning. “confidential” #NoRecruitNoPay™ #FearNoMore™ “The Billion Dollar Question Remains? How Do They Get Away With It?” ~KK #ObamaAdministrationCabinet KK© 2015 All Rights Reserved
    Update added by user Apr 27, 2015
    I coined “Melaleuca’s” compensation scheme –

    (RBI™) Recruiting Based Income.(RBIs™) only pay for recruiting and/or helping recruit.

    Only with recruiting can you potentially be paid on your “MLM.downline group.” “Limited pay on personals, caps apply w/o pandering/recruiting. “Sick huh?

    Hence [NoRecruitNoPay™] Keep in mind my business was a $2’000’000 + annual business…and, I’m sure it still is!
    Now, what a (RBI™) plan pays you w/o recruiting is your-

    (TRI™)True Residual Income.

    I was part of Melaleuca, Inc. for sixteen years – a few of those years actually weren’t all that bad. However, things became very sketchy… . (Meaning: It’s A Mess) & it’s a “DECEPTIVE MLM PYRAMID SCHEME MESS”

    “In 1991 Melaleuca received a cease-and-desist order for violating Michigan’s anti-pyramid scheme laws.….

    Google_ Melaleuca politics, scams, frivolous lawsuits, discrimination concerns… lies about not being MLM/ Multilevel-Marketing, Melaleuca’s, cancellation problems and complaints.

    Don’t be a fool like me… research every detail of this _MLM_SCHEME.

    Goodluck, you’ll need it. #KK

    PS. NO DUE PROCESS/ I was terminated/ after 16 years of service – with a phone call by- Alan Pariser -Melaleuca’s top, Outfited/ MLM/ Shill… Then I was threatened, if I exposed the perpetrator- “alan pariser” and/or his company, Melaleuca, Inc. would put a restraining order against me! #GoSellYourRacket #DOJ #DSA

    *ºº… 04.01.16 2:09p
    *ºº (AWU/ persented by` Alan D. Pariser)


    Ken Klocke “Grounded_Thesis” Copyright KK© All Rights Reserved. ~e~™ Terminated by a shameless *Mela_shillº “messenger”

    Melaleuca *convenience *certificates? or convenient ripoff? – Ken Klocke ~e…/melaleuca-convenience…..

    “The truth is incontrovertible. Malice may attack it, ignorance may deride it, but in the end, there it is.” – Winston Churchill

Leave a Reply

Back to Top ↑