Delaware House Passes HB 162 to Regulate MLMs
On June 23, 2025, the Delaware House Passes HB 162, titled “An Act to Amend Title 6 of the Delaware Code Relating to Multilevel Distribution Companies.” The bill, which aims to curb deceptive practices in multi-level marketing (MLM), introduces strict disclosure requirements and consumer protections, sparking heated debate within the industry.
Key Provisions of HB 162
HB 162 defines MLMs and mandates transparency for new recruits within 48 hours of signup, including:
- A state disclaimer clarifying Delaware doesn’t endorse MLMs.
- Company details, compensation plans, and inventory requirements.
- Earnings disclaimers and data on participants’ income over three years.
- Details on training, services, and product buy-back programs.
- Median and typical earnings of all participants.
The bill prohibits MLMs from requiring product purchases to participate unless they agree to repurchase resalable goods. New recruits can cancel contracts within three months, with MLMs required to buy back products at 90% of the original price. Violations trigger treble damages, attorney fees, and court costs for affected participants.
Industry Backlash
The Direct Selling Association (DSA) labeled HB 162 an “anti-MLM bill,” with CEO Dave Grimaldi calling it a “serious development” that imposes “unworkable restrictions” and threatens “freedom to earn.” On June 21, the DSA rallied MLM companies for a lobbying campaign to block the bill in the Senate, framing it as a threat to independent business.
What’s Next?
HB 162 heads to a Senate Committee meeting on June 24, 2025, and is expected to reach the full Senate by June 30. While supporters see it as a win for consumer rights, critics argue it could stifle legitimate MLM businesses. The outcome remains uncertain as Delaware’s direct sellers gear up for a contentious fight.