Idaho Code
Idaho Code

Idaho Code § 18-3101 (2026)

pyramid promotional schemes prohibited — Penalties — Sale of interest voidable — Scope of remedy. 

✓ current as of May 2026
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pyramid promotional schemes prohibited — Penalties — Sale of interest voidable — Scope of remedy. 

(1) It is illegal and prohibited for any person, or any agent or employee thereof, to establish, promote, offer, operate, advertise or grant participation in any pyramid promotional scheme.

(2)  As used in this section:
(a)  "Appropriate inventory repurchase program" means a program by which a plan or operation repurchases, upon request at the termination of a participant’s business relationship with the plan or operation and based upon commercially reasonable terms, current and marketable inventory purchased and maintained by the participant for resale, use or consumption, provided such plan or operation clearly describes the program in its recruiting literature, sales manual, or contracts with participants, including the manner in which the repurchase is exercised and disclosure of any inventory that is not eligible for repurchase under the program.
(b)  "Commercially reasonable terms" means the repurchase of current and marketable inventory within twelve (12) months from the date of original purchase at not less than ninety percent (90%) of the original net cost to the participant, less appropriate set-offs and legal claims, if any. In the case of service products, the repurchase of such service products shall be on a pro rata basis, unless clearly disclosed otherwise to the participant, in order to qualify as "commercially reasonable terms."
(c)  "Compensation" means a payment of any money, thing of value, or financial benefit.
(d)  "Consideration" means a payment of any money, or the purchase of goods, services, or intangible property but shall not include:
1.  The purchase of goods or services furnished at cost to be used in making sales and not for resale.
2.  Time and effort spent in pursuit of sales or recruiting activities.
(e)  "Current and marketable" includes inventory that, in the case of consumable or durable goods, is unopened, unused and within its commercially reasonable use of shelf-life period. In the case of services and intangible property, including internet sites, "current and marketable" means the unexpired portion of any contract or agreement. The term "current and marketable" does not include inventory that has been clearly described to the participant prior to purchase as a seasonal, discontinued, or special promotion product not subject to the plan or operation’s inventory repurchase program.
(f)  "Inventory" includes both goods and services, including company-produced promotional materials, sales aids and sales kits that the plan or operation requires independent salespersons to purchase.
(g)  "Inventory loading" means that the plan or operation requires or encourages its independent salespersons to purchase inventory in an amount that unreasonably exceeds that which the salesperson can expect to resell for ultimate consumption, or to use or consume, in a reasonable time period.
(h)  "Participant" means a natural person who joins a plan or operation.
(i)  "Person" means a natural person, partnership, corporation, trust, estate, business trust, joint venture, unincorporated association, or any other legal or commercial entity.
(j)  "Promote" means to contrive, prepare, establish, plan, operate, advertise or otherwise induce or attempt to induce another person to be a participant.
(k)  "Pyramid promotional scheme" means any plan or operation in which a participant gives consideration for the right to receive compensation that is derived primarily from the recruitment of other persons as participants in the plan or operation rather than from the sales of goods, services or intangible property to participants or by participants to others.
(3)  A limitation as to the number of persons who may participate, or the presence of additional conditions affecting eligibility, or upon payment of anything of value by a person whereby the person obtains any other property in addition to the right to receive consideration, does not change the identity of the scheme as a pyramid promotional scheme.
(4)  Any person, or any agent or employee thereof who willfully and knowingly promotes, offers, advertises, or grants participation in a pyramid promotional scheme shall be guilty of a felony.
(5)  All pyramid promotional schemes offered by the same person, or agents or employees thereof, or any person controlled by or affiliated with such person, for the same type of consideration, at substantially the same period of time and for the same general purpose, shall be deemed to be one (1) integrated pyramid promotional scheme, even though such pyramid promotional schemes may be given different names or other designations.
(6)  Nothing in this section or in any rule promulgated pursuant to this section shall be construed to prohibit a plan or operation, or to define such plan or operation as a pyramid promotional scheme, based upon the fact that participants in the plan or operation give consideration in return for the right to receive compensation based upon purchases of goods, services or intangible property by participants for personal use, consumption or resale, provided the plan or operation implements an appropriate inventory repurchase program and does not promote inventory loading.
(7)  Any violation of this section shall also be deemed an unfair and deceptive practice in violation of the Idaho consumer protection act. Any person aggrieved by a violation of this section can recover monetary damages pursuant to the Idaho consumer protection act.
(8)  The rights and remedies that are granted under the provisions of this section to purchasers in pyramid promotional schemes are independent of and in addition to any other right or remedy available to them in law or equity, and nothing contained herein shall be construed to diminish or abrogate any such right or remedy.
Notes of Decisions
Cited in 11 cases, 1955–1999 · leading case: State v. Urie, 437 P.2d 24 (Idaho 1968).
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State v. Urie, 437 P.2d 24 (Idaho 1968). · cites it 12× “Fraley, to defraud the Fireman's Fund Insurance Company by concocting a story that Fraley had received serious injuries resulting in permanent paralysis from a fall into an elevator pit at the Magic Valley Bean Company in Kimberly, Idaho, on November 17, 1963.”
State v. Larsen, 286 P.2d 646 (Idaho 1955). · cites it 22× “The prosecuting attorney dismissed that information June 25, 1954; on the same date he filed an information charging appellant with fraudulently obtaining property, grounded upon I.C. § 18-3101 which reads in part as follows: "Every person who knowingly and designedly by any…”
State v. Roderick, 375 P.2d 1005 (Idaho 1962). · cites it 8× “” Following trial and verdict of guilty, defendant was convicted and sentenced to the state penitentiary under the provisions of I.C. § 18-3101. The material provisions of the statute are: “Every person who knowingly and designedly by any false or fraudulent representation or…”
Maxfield v. State, 700 P.2d 115 (Idaho Ct. App. 1985). · cites it 4× “B The next claim neglected by the district court involves Maxfield’s conviction on two counts of obtaining money under false pretenses, I.C. § 18-3101. Count XVII of the prosecutor’s information alleged that Max-field received payment from a woman for certain ineffective pills…”
Nelson v. Armstrong, 582 P.2d 1100 (Idaho 1978). · cites it 2× “In our view, the threat of civil actions by injured lenders and of criminal prosecutions under I.C. § 18-3101 should adequately discourage the practice of falsifying credit instruments.”
State v. Moore, 454 P.2d 51 (Idaho 1969). · cites it 2× “On October 23, 1967, appellant Walt Moore pleaded guilty to the charge of obtaining money under false pretenses contrary to I.C. § 18-3101. No question is raised as to the efficacy of that plea.”
United States v. Gold Unlimited, Inc., 177 F.3d 472 (6th Cir. 1999). “§ 44-1731(3) (West 1998); Idaho Code § 18-3101 (2)(a) (1998); 720 III.”
State v. Jesser, 501 P.2d 727 (Idaho 1972). “§ 18-3101 provides: “Every person who knowingly and designedly by any false or fraudulent representation or pretense, defrauds any other person of money, labor or property * * * is punishable in the same manner and to the same extent as for larceny of the money or the value of…”
State v. Campbell, 543 P.2d 1171 (Idaho 1975). · cites it 2× “§ 18-3101, obtaining money, property or labor under false pretenses.”
Fremont-Madison Irrigation Dist. v. United States Dep't of the Interior, 763 F.2d 1084 (9th Cir. 1985). “This case discusses, in a criminal law context, Idaho Code § 18-3101 , a predecessor statute of Idaho Code § 63-108 (1984 Supp.”
State v. Krepp, 688 P.2d 1219 (Idaho Ct. App. 1984). · cites it 2× “Krepp was charged with, and convicted of, obtaining money under false pretenses — a violation of I.C. § 18-3101 as then in effect. At trial Mrs.”
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