MLM Law: Utah's Definitions Regarding Multilevel Marketing
76-6a-2. Definitions. As used in this chapter:
(1) "Consideration" does not include payment for sales demonstration equipment and materials furnished at cost for use in making sales and not for resale, or time or effort spent in selling or recruiting activities.
(2) "Compensation" means money bonuses, commissions, overrides, prizes, or other real or personal property, tangible or intangible.
(3) "Person" includes a business trust, estate, trust, joint venture, or any other legal or commercial entity.
(4) "Pyramid scheme" means any sales device or plan under which a person gives consideration to another person in exchange for compensation or the right to receive compensation which is derived primarily from the introduction of other persons into the sales device or plan rather than from the sale of goods, services, or other property.
Enacted by Chapter 89, 1983 General Session
76-6a-3. Schemes prohibited -- Violation as deceptive consumer sales practice -- Prosecution of civil violations.
(1) A person may not organize, establish, promote, or administer any pyramid scheme.
(2) A criminal conviction under this chapter is prima facie evidence of a violation of Section 13-11-4, the Utah Consumer Sales Practices Act.
(3) Any violation of this chapter constitutes a violation of Section 13-11-4, the Utah Consumer Sales Practices Act.
(4) All civil violations of this chapter shall be investigated and prosecuted as prescribed by the Utah Consumer Sales Practices Act.
76-6a-5. Plan provisions not constituting defenses. It is not a defense to an action brought under this chapter if:
(1) The sales device or plan limits the number of persons who may be introduced into it;
(2) The sales device or plan includes additional conditions affecting eligibility for introduction into it or when compensation is received from it; or
(3) A person receives property or services in addition to the compensation or right to receive compensation in connection with a pyramid scheme.
13-11-4. Deceptive act or practice by supplier.
(1) A deceptive act or practice by a supplier in connection with a consumer transaction violates this chapter whether it occurs before, during, or after the transaction.
(2) Without limiting the scope of Subsection (1), a supplier commits a deceptive act or practice if the supplier knowingly or intentionally:
(a) indicates that the subject of a consumer transaction has sponsorship, approval, performance characteristics, accessories, uses, or benefits, if it has not;
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(k) indicates that the consumer will receive a rebate, discount, or other benefit as an inducement for entering into a consumer transaction in return for giving the supplier the names of prospective consumers or otherwise helping the supplier to enter into other consumer transactions, if receipt of the benefit is contingent on an event occurring after the consumer enters into the transaction;