Matzie bill to strengthen anti-pyramid scheme law passes state Senate unanimously, heads for governor’s desk

HARRISBURG, Nov. 19 – Better protections are on the horizon for Pennsylvania consumers after the Pa. Senate today unanimously passed state Rep. Rob Matzie’s bill to update and improve the commonwealth’s law prohibiting pyramid schemes.

Matzie, D-Beaver/Allegheny, said his H.B. 1534 will both update the current antiquated law and clarify the distinction between legitimate direct-sale companies and fly-by-night schemes designed to scam consumers.

“We can’t protect consumers with outdated laws, and our anti-pyramid law is so old it still refers to chain letters,” said Matzie, who is Democratic chairman of the House Consumer Affairs Committee. “My bill would bring the law up to date so that it reflects the complexity of today’s criminal fraud and has the necessary teeth to be an effective enforcement tool.

“The bill would also clarify what constitutes acceptable business practices to help guide legitimate direct selling companies, while helping enforcement officers target the bad actors. The Senate’s move today means Pennsylvania consumers are one step closer to better protection.”

Matzie said the law will encourage direct-sale companies to adopt the following two provisions that have been successful in other states:

  • An anti-inventory loading provision that would discourage companies from saddling individual direct sellers with more products or services then they can sell or use.
  • A buyback provision that would allow individuals to sell back at 90% of original cost any unused and currently marketable products purchased within the last 12 months.

The bill passed the House unanimously in June 2019 and now heads to the governor’s desk.