“Points” given for recruitment ruled same as cash and prohibited
11 January 2010
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By D. Jack Smith
The state of South Carolina brought suit against a multi-level marketing company seeking an injunction and civil penalties for alleged violations of the state statute prohibiting pyramid schemes.
South Carolina law prohibits “any contract or agreement between an individual and any pyramid club, or other group organized or brought together under any plan or device whereby fees or dues or anything of material value to be paid or given by members thereof are to be paid or given to any other member thereof, which plan or device includes any provision for the increase of such membership through a chain process of new members securing other new members and thereby advancing themselves in the group to a position where such members in turn receive fees, dues, or things of material value from other members.”
By its language, this statute is broad in its scope and early on the attorney general’s office took advantage of this wording to try and prohibit all multi-level marketing activities in the state of South Carolina.
To read this article in its entirety you may purchase the January 2010 Edition of NMBJ by visiting the NMBJ Online Store or call 815.726.5555
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