CHAIN DISTRIBUTOR SCHEMES

RSA tit. XXXI, ch. 358-B

in effect

RSA 358-B:1 Definitions.

358-B:1. Definitions. In this chapter: I. "Chain distributor scheme" means a sales device whereby a person, upon condition that he make an investment, is granted a license or right to solicit or recruit for profit or economic gain one or more additional persons who are also granted such license or right upon condition of making an investment and may further perpetuate the chain of persons who are granted such license or right upon such condition. A limitation as to the number of persons who may participate, or the presence of additional conditions affecting eligibility for such license or right to recruit or solicit or the receipt of profits therefrom, does not change the identity of the scheme as a chain distributor scheme. II. "Investment" means any acquisition, for a consideration other than personal services, of property, tangible or intangible, and includes, without limitation, franchises, business opportunities and services. It does not include sales demonstration equipment and materials furnished at cost for use in making sales and not for resale. Source. 1975, 157:1, eff. July 25, 1975.

RSA 358-B:2 Chain Distributor Schemes Prohibited.

358-B:2. Chain Distributor Schemes Prohibited. It shall be unlawful for any person, partnership, corporation, trust or association, or any agent or employee thereof, to promote, offer or grant participation in a chain distributor scheme. Source. 1975, 157:1, eff. July 25, 1975.

RSA 358-B:3 Penalty.

358-B:3. Penalty. Any person who violates the provisions of this chapter or an injunction issued under RSA 358-B:4 shall be guilty of a class B felony. Source. 1975, 157:1, eff. July 25, 1975.

RSA 358-B:4 Enforcement.

358-B:4. Enforcement. I. Whenever the attorney general has reason to believe that a chain distributor scheme is being or is about to be conducted by any person, he may bring an action in the name of the state against such person, and in connection with such action may request the court to issue a temporary restraining order and a temporary or permanent injunction against such scheme. If the court finds that a chain distribution scheme is being operated in violation of this chapter, the court shall award to the state civil penalties up to $10,000 for each such violation. II. In connection with any action brought under this section, the attorney general may also petition the court to appoint a receiver to take charge of the business of any person during the course of litigation for the purpose of preventing such person from continuing to engage in any act or practice declared to be unlawful by this chapter and of preserving the assets of said person to restore to any other person any money or property, real or personal, acquired by any unlawful act or practice. The receiver shall have the authority to sue for, collect, receive and take into his possession all the goods and chattels, rights and credits, moneys and effects, lands and tenements, books, records, documents, papers, choses in action, bills, notes and property of every description, including property with which such property has been mingled if it cannot be identified in kind because of such commingling derived by means of any unlawful act or practice, and to sell, convey and assign the same and hold, dispose and distribute the proceeds thereof under the direction of the court. III. An action under this section may be brought in the superior court of the county in which the person who is alleged to be conducting or about to conduct a chain distributor scheme resides or has his principal place of business, or, with the consent of the parties, or if the person is a nonresident and has no permanent place of business within the state, in the superior court of Merrimack county. Source. 1975, 157:1, eff. July 25, 1975.

RSA 358-B:5 Unfair Trade Practice.

358-B:5. Unfair Trade Practice. Any violation of RSA 358-B:2 shall also constitute an unfair method of competition or any unfair or deceptive act or practice within the meaning of RSA 358-A, and shall subject the defendant in such case to a cause of action under RSA 358-A:10. Source. 1975, 157:1, eff. July 25, 1975.

Source: New Hampshire General Court (gc.nh.gov)URL: https://gc.nh.gov/rsa/html/NHTOC/NHTOC-XXXI-358-B.htmFetched: 10/20/2026