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HB 162

AN ACT TO AMEND TITLE 6 OF THE DELAWARE CODE RELATING TO MULTILEVEL DISTRIBUTION COMPANIES.

153rd General Assembly (2025-2026) Introduced by Darius Brown and 13 co-sponsors

HB 162 strengthens Delaware's multilevel marketing company regulations by establishing stricter oversight and disclosure requirements to protect direct-sales participants from predatory schemes.

Assigned to Banking, Business, Insurance & Technology Committee in Senate
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Bill Summary · HB 162

Legislative bill overview

HB 162 amends Delaware's regulations governing multilevel distribution companies (MLMs), which are direct-sales businesses where participants earn income both from product sales and recruiting others. The bill modifies existing oversight provisions in Title 6 of the Delaware Code to establish or strengthen protections against predatory multilevel marketing schemes.

Why is this important

MLMs operate in a legal gray area between legitimate direct-sales businesses and illegal pyramid schemes. Strengthened regulations can protect consumers and participants from fraudulent schemes that primarily profit from recruitment rather than actual product sales. Delaware's amendments could serve as a model for other states addressing similar concerns about income claims, participant losses, and transparency requirements.

Potential points of contention

  • Definition and scope: Disagreement over which companies qualify as MLMs versus legitimate direct-sales operations, potentially affecting existing businesses operating in Delaware
  • Compliance burden: Small direct-sales companies may argue that new regulatory requirements impose excessive administrative costs and paperwork obligations
  • Income disclosure: If the bill requires detailed disclosure of actual participant earnings, companies may resist revealing data that demonstrates most participants lose money or earn minimal income

Compiled from official sources — confirm details with the bill’s official record.

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