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Current Status Bill Number:View additional legislative information at the LPITS web site.1238 Type of Legislation:General Bill GB Introducing Body:Senate Introduced Date:20000314 Primary Sponsor:Hayes All Sponsors:Hayes Drafted Document Number:l:\council\bills\dka\3761mm00.doc Companion Bill Number:4750 Residing Body:Senate Current Committee:Banking and Insurance Committee 02 SBI Subject:Pyramid and Chain Schemes Act, Unfair trade practices, Businesses and Corporations, Consumer Affairs History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ ------ 20000315 Companion Bill No. 4750 Senate 20000314 Introduced, read first time, 02 SBI referred to Committee Versions of This Bill
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 19 TO TITLE 37 SO AS TO ENACT THE "PYRAMID AND CHAIN SCHEMES ACT", TO DEFINE AND PROHIBIT A PYRAMID DISTRIBUTION SCHEME, AND TO PROVIDE FOR CIVIL REMEDIES AND CRIMINAL PENALTIES FOR VIOLATIONS OF THE PROHIBITION.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 37 of the 1976 Code is amended by adding:
Section 37-19-10. This chapter may be cited as the 'Pyramid and Chain Schemes Act'.
Section 37-19-20. As used in this chapter:
(1) 'Compensation' means payment based on sale of goods or services to a person who is a participant in the pyramid distribution scheme or who is making a purchase so as to participate in the scheme.
(2) 'Pyramid distribution scheme' means a plan, program, or device utilizing a pyramid or chain process in which a participant gives consideration in exchange for the opportunity to receive compensation or something of value in return for inducing another person to become a participant in the program.
Section 37-19-30. A person may not establish, operate, participate in, or promote a pyramid distribution scheme as defined in Section 37-19-20.
Section 37-19-40. A violation of this chapter is an unfair trade practice and is subject to the enforcement provisions of the South Carolina Unfair Trade Practices Act, in addition to other remedies provided in this chapter.
Section 37-19-50. A person who suffers loss by reason of a violation of this chapter may bring a civil action to enforce the provisions and, if successful in the action, shall recover reasonable attorney fees and court costs incurred in connection with bringing the action.
Section 37-19-60. (A) A person who establishes or operates a pyramid distribution scheme is guilty of a felony and, upon conviction, must be fined not more than twenty-five thousand dollars or imprisoned not more than twenty years, or both.
(B) A person who participates in or promotes a pyramid distribution scheme is guilty of a misdemeanor and, upon conviction, must be fined not more than one thousand dollars or imprisoned not more than sixty days, or both.
Section 37-19-70. A judge of a circuit court has jurisdiction, upon petition by the Attorney General of this State or a county solicitor, to enjoin as an unfair trade practice the continuation of a pyramid distribution scheme. The court may:
(1) assess civil penalties and attorney fees to the Attorney General or the county solicitor; and
(2) appoint a receiver to secure and distribute assets obtained by a defendant through participation in a pyramid distribution scheme.
Section 37-19-80. A contract for which the consideration or a portion of the consideration is the opportunity to participate in a pyramid distribution scheme is contrary to public policy and is void and unenforceable."
SECTION 2. This act takes effect upon approval by the Governor.
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