In this subtitle, “multilevel distribution company” means a person who, for consideration, distributes goods or services through independent agents, contractors, or distributors at different levels of distribution with rates of pricing or discounting that differ from 1 level to another.

A multilevel distribution company may not require a participant in its marketing program to buy goods or services or pay any other consideration to participate in the marketing program unless the multilevel distribution company agrees to repurchase the goods: that are in resalable condition; and that the participant has been unable to sell 3 months after receipt of the goods first ordered. A multilevel distribution company shall state in writing in each contract of participation in its marketing program that: a participant may cancel the contract for any reason within 3 months after the date of receipt of goods or services first ordered by written notice to the multilevel distribution company; and on cancellation, the multilevel distribution company shall repurchase the goods. The repurchase price shall be at least 90% of the original price paid by the participant.

A multilevel distribution company may not represent directly or indirectly that participants in its marketing program may or will earn a stated gross or net amount or represent in any way the past earnings of participants unless the stated gross amount, net amount, or past earnings: are those of a substantial number of participants in the community or geographic area where the representation is made; and accurately reflect the average earnings of participants under circumstances similar to those of the participant or prospective participant to whom the representation is made.

The Attorney General or a State’s Attorney may sue to enjoin, wholly or partly, the activities of a multilevel distribution company that violate this subtitle. At least 10 days before seeking injunctive relief, the Attorney General or State’s Attorney shall send written notice of the alleged violation by certified mail to the principal place of business of the multilevel distribution company.

A person who violates this subtitle is guilty of a misdemeanor and, on conviction, is subject to a fine not exceeding $10,000. Each officer and each director of a corporation that violates this subtitle, each partner of a partnership that violates this subtitle, and the owner of a sole proprietorship that violates this subtitle is also subject to the penalty under this section.