Delaware’s House Bill 162 is a proposed piece of legislation aimed at regulating multilevel distribution companies (network marketing businesses). The bill would require these companies to:

  • Provide comprehensive disclosures to potential participants, including information on compensation plans, average earnings, training, cancellation rights, and product return policies.
  • Offer a guaranteed buy-back of any required purchases made by participants.
  • Face civil penalties, including triple damages, for failing to comply.

Why It’s Controversial

The bill has raised concerns within the direct selling industry. The Direct Selling Association (DSA) argues that the legislation is too broad and could harm ethical businesses, as well as restrict opportunities for legitimate entrepreneurs.

Current Status

  • HB 162 was passed by the Delaware House of Representatives on 17 June 2025.
  • It is now under review by the Senate Banking, Business, Insurance & Technology Committee.
  • However, the committee is not expected to take any action on it until the legislative session resumes in January 2026.

Industry Response

The DSA has been actively meeting with legislators to voice concerns and advocate for more balanced consumer protection measures. The organisation’s CEO, Dave Grimaldi, stated that while lawmakers are open to feedback, the bill in its current form could still negatively affect both consumers and businesses.

What to Expect Next

  • The bill is on hold until January 2026.
  • The direct selling industry is likely to use the interim period to propose amendments or alternatives to the bill.
  • Continued discussions between lawmakers and industry leaders are expected, aimed at finding a more effective and fair regulatory approach.

Summary Table

Key PointDetails
ScopeIntroduces strict disclosure and refund requirements for MLM companies.
Industry ConcernsConsidered overly broad and potentially harmful to legitimate operators.
StatusPassed in the House, Senate review delayed until January 2026.
Next StepsFurther lobbying and possible amendments to be discussed.