HRS §480-3.3
What counts as an illegal endless chain scheme
This law says that running an endless chain scheme is an unfair and deceptive business practice. An endless chain scheme is when you pay to join and earn money by bringing in new people, not by selling products to outsiders. Payments from real sales to non-members are not part of this definition.
everyone
The statute, as written — Endless chain schemes
A person engages in an unfair method of competition and an unfair or deceptive act or practice within the meaning of section 480-2 when, in the conduct of any trade or commerce, the person contrives, prepares, sets up, proposes, or operates any endless chain scheme. As used in this section, an endless chain scheme means any scheme for the disposal or distribution of property whereby a participant pays a valuable consideration for the chance to receive compensation for introducing one or more additional persons into participation in the scheme, or for the chance to receive compensation when a person introduced by the participant introduces a new participant. Compensation, as used in this section, does not mean or include payments based upon sales made to persons who are not participants in the scheme and who are not purchasing in order to participate in the scheme.
Sections this one refers to
§480-2 Unfair business tricks and competition are illegal
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