18.2-239 - Pyramid promotional schemes; misdemeanor; definitions; contracts void. - Virginia Statutes

§ 18.2-239. Pyramid promotional schemes; misdemeanor; definitions; contractsvoid.

Every person who contrives, prepares, sets up, operates, advertises orpromotes any pyramid promotional scheme shall be guilty of a Class 1misdemeanor. For the purposes of this section:

(1) "Compensation" means the transfer of money or anything of value.

"Compensation" does not mean payment based on sales of goods or services topersons who are not participants in the scheme and who are not purchasing inorder to participate in the scheme;

(2) "Consideration" means the payment of cash or the purchase of goods,services, or intangible property;

(3) "Promotes" means inducing one or more other persons to become aparticipant; and

(4) "Pyramid promotional scheme" means any plan or operation by which aperson gives consideration for the opportunity to receive compensation amajority of which is derived from the introduction of other persons into theplan or operation rather than from the sale or consumption of goods,services, or intangible property by a participant or other persons introducedinto the plan or operation.

All contracts and agreements, now existing or hereafter formed, whereof thewhole or any part of the consideration is given for the right to participatein pyramid promotional scheme programs, are against public policy, void andunenforceable.

Any violation of the provisions of this section shall constitute a prohibitedpractice under the provisions of § 59.1-200 and shall be subject to any andall of the enforcement provisions of the Virginia Consumer Protection Act (§59.1-196 et seq.).

(Code 1950, §§ 59.1-67.1, 59.1-67.2; 1970, c. 450; 1975, cc. 14, 15; 2008,cc. 791, 842.)