Report on Pre-Paid Legal Services, Inc.


A report on Prepaid Legal by expert Robert FitzPatrick, nationally recognized by both law enforcement and the private sector, where he concludes:

“Pre-Paid Legal Services Inc. is not a direct-selling company but a bogus ‘business opportunity’ scheme in which money is transferred from hundreds of thousands of consumers who are falsely lured to invest time and capital, only to inevitably lose money and quit the scheme year after year, to the benefit of a handful of company owners and recruitment promoters. Pre-Paid Legal is an ‘investor Ponzi scheme’ in which funds gained from the fleeced consumers are also used to manipulate Pre-Paid’s share price which further enriches a handful of company owners at the cost of the company as a whole.”

According to the report, between the years of 2007-2008, Pre-Paid Legal Services Inc. (NYSE:PPD) repurchased over $111,175,000 worth of stock while executive insiders were, from 2007 through February of 2009, simultaneously selling their personal Pre-Paid Legal Services Inc. holdings on the open market for over $31,654,000. That is approximately 28 percent of the entire corporate stock repurchase program ending up in the pockets of executives. It is no wonder the public has little trust in certain corporate CEOs because where Pre-Paid Legal Services Inc. got the $111,175,000 to repurchase shares in the first place was through luring members into the scheme with the promise of an income opportunity when these people were at the most vulnerable points in life into an endless chain compensation plan that mathematically doomed them to failure before they even started.

There are also critical points of similarity between the Bernie Madoff-massive Ponzi scheme and the recruitment based multi-level marketing compensation plan of Pre-Paid Legal Services Inc. According to the recently released report, just as Bernie Madoff had no real trading profits to distribute to investors and instead relied upon monies paid to investors to come from new investors, in like manner Pre-Paid Legal Services Inc. utilizes the same money transfer game by delegating the recruitment aspect of the scheme to its “members” through the promise of outrageous income returns. Both Madoff and Pre-Paid Legal Services Inc. are also closed systems. They both rely upon the transfer of money within the scheme as opposed to money from retail sales generated outside the scheme.

How in the world can a company listed on the New York Stock Exchange get away for years with a business model that lures people into a fraudulent endless chain income opportunity rarely if ever achieved whereby the goal for each quarter is to repurchase as many shares as possible and call it, ‘Returning shareholder value,’ when in reality the only ‘value’ being returned is to the pockets of the Pre-Paid Legal Services Inc. senior executives?

53 thoughts on “Report on Pre-Paid Legal Services, Inc.

  1. Barry’s ‘closed system’ analogy sounds nearly like the ‘closed market swindle’ that British born author David Brear has coined. Indeed, most critics of MLM schemes repeat basically the same themes. Maybe folks like Amway, MonaVie, and Herbalife (to name a few) benefit from the broken record ‘pyramid scheme’ allegations which don’t fully describe how these ‘closed system’ swindles/frauds actually operate.

    Amway (amongst others) operates a monopoly over their dream inspired distributors and therefore extract their ‘pound of flesh’ by requiring all to pay monopolistic (money extracting) prices for products that have no real retail market outside of the prosprity dreaming folk. Indeed, calling these buyers ‘independent business owners’ or ‘distributors’ is a load of hogwash, when they are–for all intents and purposes–the only buyers. The monopoly prices guarantee that internal sales will continue to be nearly all of sales–reported as being about 96%.

    Then, the Amway kingpins operate a secondary monopoly business which keeps the trapped Amway buyers buying not only the products, but the mostly mundane tools as well–a tutorial on how to con others into joining the swindle. This secondary swindle–the tool scam–is an obvious ‘closed system’. Significantly, these pricy tools sale for pennies on the dollar where prosperity dreams are really are sold, on eBay!

    Barry, why not expose Amway? Prepaid Legal, yeah, that’s fine, but where’s the beef? Why not sniff around Ada for a while?

  2. Jonathan

    The reason that Barry doesn’t go after Amway is that Barry is running a “short and distort” scam. He shorts the stock of publicly traded companies and mounts a negative campaign against them, in hopes of decreasing their stock price so he will profit. If a company is not publicly traded it makes no sense for him to go after them, because there is no way for him to profit. If the writer(s) of this blog did their due diligence they would find that Barry has a history of stock scams.

    I read Barry’s statement about WSJ connecting PPLs largest institutional holder and Madoff. That is the dumbest thing I’ve ever seen. PPL does not control where their investors put their money. If I bought Microsoft stock and also bought stock in Madoff, does that make Microsoft a scam. Of course not. Renaissance Tech. also trades U.S. Treasury bonds. By Barry’s logic U.S. Treasury Bonds are also a scam. They also trade a large volume of NASDAQ stocks. Is Barry also suggesting that the NASDAQ is a scam?

    Saying that PPL is a Ponzi Scheme is ridiculous. The commissions paid to associates come from the sale of PPL memberships, not from fees paid to become an associate. If you take the time to look at their financial statements you will see that 94% of their total revenue comes from sales of PPL memberships. You will also see that the company’s expenses for maintaining and servicing the sales force exceeds the amount of revenue from associate fees, disproving the allegation that PPL relies on new “investors” to stay afloat. Unlike many other network marketing companies PPL’s service provides more value than the price paid for it and most of their customers are not associates. If you think that MLM is a Ponzi Scheme because people pay a fee to become independent business owners then your insurance agent and any franchised business is also a scam. PPL is endorsed by 4 former Attorneys General, Pres. of the U.S. Chamber of Commerce, Pres. of the National Black Chamber of Commerce and former President of the American Bar Association. These are people who have a reputation to uphold and would not align themselves with an illegal “scheme”. They have been featured in Money, Forbes (200 Best Small Companies), Fortune, Success and on and on and on. They also have a network of thousands of attorneys across the U.S. and Canada. Over 40,000 U.S. businesses offer PPL plans to their employees as a benefit. In many states they are regulated by the state insurance commissioner. I have never seen a company with this much third party validation of this caliber. If you can produce someone with more business and legal knowledge than these people and publications who claims that PPL is a scam please have them contact me. I would love to hear what they have to say. As of right now you only have “short and distort” scammers and a handful of whiners who quit when they didn’t get rich overnight.

    I’m sick and tired of hearing about how so many people get “duped” into joining a network marketing company and don’t make any money. Yes there are scams out there, but if people would take the time to find out what is legit and what isn’t (info is readily available from and a ton of other online resources) instead of falling for a sales pitch, that would take care of half the problem. They don’t make any money, because they don’t do anything or are unwilling to follow the system in place. My first attempt at network marketing was with Amway about 15 years ago. I had two retail customers, but after sharing the opportunity with 3 people and getting 3 “no”s I quit. Now I am successfully building a network marketing business. The difference is that now I’m actually doing something. There were no income claims made. I was told that I get paid this much for each sale and this much for each sale my team makes. The idea of making hundreds of thousands or millions of dollars was not even presented to me until after I started and made some money. I have people on my team that signed up and never even so much as told anyone that they were in business. Even after I’ve set aside time to help them individually they make some stupid excuse as to why they can’t simply call and introduce me to the people they know so I can get them to see a presentation. There are others who don’t listen and do exactly the opposite of what they are taught to do. My own brother is one of these people. He joined then called a few people and said “I’ve got this business for you to look at and you can get paid to sign other people up.” Those people all say no and the person gets discouraged. I would say no to that too. The bottom line is that anyone who is persistant and coachable will be successful in network marketing. It will not happen overnight, but it will happen. Like any sales profession, it’s a numbers game.

    If you want to report on fraud then you need to be writing about Barry and how his Fraud Discovery Institute makes it’s money. While you are at it go ahead and write about all the scam websites out there who are extorting businesses by allowing anyone to anonymously make claims against a company and not verifying the info unless the company “subscribes” to their website.

  3. Tracy Coenen

    Johnathan – The “short & distort scam” you say Barry is running would only be the case if he was “distorting.” Sadly, he’s only reporting the facts about the company along with his opinions. There’s no distorting.

    How do I know? I work with Barry on many of his cases and have been responsible for a good chunk of the research and report writing. I know that what he prints is true. Sad. But true.

    And the WSJ did connect PPD’s largest institutional holder and Madoff. The article Barry cited very clearly outlined this holder’s connection to Madoff. It’s a simple fact that they are connected, and that the WSJ reported about it.

    You say Barry has a “history of stock scams.” He openly admits that he was convicted of a felony in the 80’s for his part in the ZZZZ Best fraud. He did his time in prison, and he doesn’t deny it. What you should probably take a look at is this PARTIAL list of frauds he’s busted since then. You’ll notice the total is almost $2 billion, and again this is only a partial list. He’s been responsible for uncovering far more fraud than he ever committed, and that’s got to be worth something.

  4. Miguel Serrano

    For many years I was just a regular Pre-Paid Legal Service member. I got my membership via my job as a benefit working for Rural Metro as a paramedic in Florida. Then I got the service again at my new job in Texas; I have been a member for about ten years. PPL has been one of the best services that I pay for each month. About two years ago I became an associate for them; and I have to say that it has been one of the best part time business that I have ever done. I get what I put into it. I myself dont even need to be an associate since I have little debt and I am doing well financially in my Job. I just enjoy telling people about the services.

    Now, that being said… I think that Barry’s motives are misleading and ill intended. I frankly dont care about what PPL does on the NYSE. I care about what they do with me and the services they provide. If someone becomes an associate and choose not to do the work required, then whose fault is that..? I hardly put any time to it and still manage to make some money.

    Good day


  5. Tracy Coenen

    Interesting concept… You don’t care if the company lies to and misleads shareholders, so long as your policy is intact. I’ve heard this type of thing before… “I don’t care who they’re screwing so long as it’s not me.”

  6. Joe T. Plumber

    Only in America, Baby, only in Primerica, Baby, can you get reamed out coming and going!

  7. Jonathan

    First I’d like to point out that you spelled my name incorrectly. That leads me to to question your skills as an investigator and report writer.

    Why did you not respond to this statement “If you can produce someone with more business and legal knowledge than these people and publications who claims that PPL is a scam please have them contact me. I would love to hear what they have to say.” You still did not produce this info. Not only did you not provide any credible evidence you also revealed yourself as one of Barry’s co conspirators.

    There is a difference between reporting the facts and distorting and yes Barry has told some outright lies. If he was being honest he would lay out all the facts and let people decide for themselves, not take bits and pieces out of context and “distort” them or outright lie. Let’s take a look at Barry’s facts.

    1. “Every key metric for Pre-Paid Legal’s business was down in 2008…”-There have been over two million people in this country laid off in the past three months. The “strong” auto makers and financial institutions have takens hundreds of billions of dollars in “bailout” money and who knows how many companies have closed their doors in the past year alone. Whose numbers aren’t down? PPL is still financially sound, can meet all their financial obligations, don’t need government money but profit is up and they have increased associate compensation.

    2. “The earnings release for the fourth quarter touts: “16th Consecutive Year of Increased Membership Revenues,” yet buries in the text of the release the fact that recruiting is down double digits. As in the past, the press release makes it sound like things are better than ever at Pre-Paid Legal, when the fact is that the company is imploding because recruiting efforts are unsuccessful.” – Recruiting is down, but membership revenues and profitability are up. How is this an implosion? How can he make the statement that the company has to rely on associate fees from new associates to stay afloat when even though recruiting is down revenues and profits are up? He just contradicted himself. Does he think everyone is to stupid to notice?

    3. “An increasing percentage of their membership revenue comes from personal memberships maintained by associates. Currently about one-third of total revenues come from the associates who maintain personal memberships and purchase marketing and training materials. Less than 20% of the Pre-Paid Legal associates sell one or more memberships to outside customers. None of these details suggests that Pre-Paid Legal is a growing business.” – The other side of the coin is that those revenues come from “vested” associates. An associate who quits or never even tries, but keeps their membership because they recognize the value of the service is still “vested” even if they are not active. Right now my organization is small and yes less than 20% of them have sold a membership. That’s not PPLs fault or mine. Even though I’ve taken time away from my family they either didn’t bother to try or they think they can reinvent the wheel and do the exact opposite of what I’ve taught them. Those who do what I teach and try have sold memberships and continue to do so.

    4. “How desperate is Pre-Paid Legal to hold up a phony stock price for future insider dumping of shares? For the year 2008, $64.3 million in cash was provided by operations, and $44.7 million of that was spent on stock repurchases. At the same time, the company had $59.7 million in debt outstanding. The company is committed to repurchasing shares at any cost.” – If Barry actually knew anything about business or investment then he would know that paying off debt isn’t always the best use of funds. I could make extra payments on my house each month, but since the return I can get on that money is greater than the interest rate on my house it would be dumb to use those funds to pay off debt. Also if PPLs debts were called tomorrow they could pay them. He also fails to mention that some of this stock is given to associates.

    5. “Since 2006, the company has repurchased 4.3 million shares at a total price of $184.6 million. During the same period, company insiders sold share totaling a whopping $59 million. Pre-Paid Legal is borrowing money and using cash generated by associates to repurchase shares, and the company insiders are getting rich while more than 85% of the company’s associates are estimated to be quitting or making no sales. These failed business owners literally fund the repurchases of company insider shares.” – Is it unusual for companies to buy back stock or insiders to sell it? Of course it’s not. There are also regulations governing how and when these transaction take place. Barry fails to mention that. Compare the revenue generated from associate fees to the expenses (aside from commissions) associated with supplying, training and maintaing the sales force. Do that and you will see how big of a lie Barry’s statements are.

    6. “Unfortunately for those who become associates of Pre-Paid Legal, they can only receive residual commissions if they become “vested” by selling at least three new memberships per quarter2 (12 per year) or maintaining a personal membership.
    By withholding residual commissions from associates who do not become vested in a quarter, Pre-Paid Legal has a potential windfall. According to regulatory reports, unearned advance commission balances totaled $62 million in 2008, $56 million in 2007, and $49 million in 2006. If the associates do not become “vested” to “earn” those commissions in the future, Pre-Paid Legal keeps the funds.” – Barry is way off here. First if someone does not maintain a personal membership and has to meet the 3 membership quota, they have no business being an associate. If they don’t feel that the product is good enough for them to use, then they shouldn’t be trying to sell it anyway. I have had several sales positions (not MLM) where I sold an ongoing service like this and did get residual income as long as I met a quota. If I quit selling, none of them continued to pay me even if I did continue to personally use the service. What PPL does here is unusual, but in a positive way, not a negative one.Secondly “unearned commissions” are not commissions that are waiting to be paid out when the associate becomes vested, they are commissions that have been advanced to the associate, but PPL has not yet collected the payment from the member. Associates are paid an advance commission for the first months membership fees and each month a payment is made a portion of the commission is “earned”. Therefore “unearned commissions” is money owed to PPL, not money they owe. If Barry’s “undercover investigation” was as thorough as he would have us believe he would know this. So he is either misinformed of is intentionally trying to decieve. He also fails to mention that if an associate quits PPL does not go after them for the unearned commissions that they owe PPL.

    7. “Pre-Paid Legal has increased the fees to become an associate, raising the cost from $57 to $72 in 2008. This 26% increase in the joining fee netted the company almost $2 million. However it did nothing to increase the likelihood for success for the vested associated. It merely accomplished even further fleecing of the doomed by design business builder.” – Those are not the associate fees. Those are the average fee paid. The fee is $249, but they did have promotions where that fee was temporarily lowered. There are actually two options now $49 or $249. The higher priced option does provide additional tools as well as incentives that help associates make more money faster. Of course it is the associate’s responsibility to actually do something, neither option will work for them if they do nothing. Once again, this is something Barry would know if his investigation was as thorough as he would have use believe. Once again compare the revenue from these fees to the expenses for maintaining the sales force. You will see those expenses exceeded the revenue.

    8. “This $249 fee is nothing but a money-maker for Pre-Paid Legal. Paying a higher fee doesn’t mean that associates will actually be able to sell more memberships. Currently less than 20% of associates actually sell one or more membership, and the simple act of charging an associate more to join the company isn’t likely to change that fact. All the increased fee does is give Pre-Paid Legal almost 2.5 times more revenue per new associate.” – The fee is normally 249. Last year there were promotional fees in effect and they continued longer than expected due to economic conditions. We were told that the fee would go back to 249. What we were not told was that there would be additional tools and a change in the commission structure allowing new associates to advance more quickly. In this situation I would have to agree with Barry on one thing. PPL deceived associates. We were not told that new associates would receive additional tools and opp for quicker advancement when fee went back to normal. Yet another positive that Barry tried to spin into a negative. PPL never said that paying more would help sell more memberships. What they did say is that those who are out there actively building their business will be able to advance and earn more quickly.

    9. “The Pre-Paid Legal opportunity is obviously not all it’s cracked up to be, as evidenced by the fact that associates quit selling memberships after five months.” – I’ve already addressed this issue more than once. The only thing I have to add is this. When I was not active and was not doing the things I was trained to do I sold no memberships and recruited no associates. When I got active and did the things I was trained to do I sold memberships and recruited associates. No one expects to not go to work and still get paid. If I don’t work at my “traditional” business I don’t get paid, why would my PPL business be any different. PPL is a business, not a welfare agency. It was several years before my traditional businesses was profitable and successful and it takes much more effort and time than my PPL biz.

    10. “In classic Bernie Madoff fashion, Pre-Paid Legal continues to recruit new investors into their scheme. Madoff sustained his money transfer system by continuously recruiting new investors. He became a master at this, promising high annual returns and a safe haven against market downturns. He implied membership in his fund was exclusive. He claimed he ran a “hedge fund” that protected investors against downturns.” – The PPL isn’t about a few people being superstar salespeople it’s about a lot of people each doing a little bit. There are associates who are superstars and make a great living selling memberships and not recruiting. The average person can’t do that. What the average person can do is sell a few memberships and recruit a few associates who do the same. That’s why recruiting is important. If we were all sales superstars then there would be no need to recruit, but even when recruiting is down profits are still up. If Barry’s claims about being a Ponzi Scheme were true then it would be impossible to have increased revenues with decreased recruiting. The whole idea is to leverage your time. Just like Barry is doing with you. He has you spend your time to bash companies so their stock price goes down and he profits.

    If what Barry prints is true and not a short and distort scam, then why do I not see anything about non public companies? I pointed out a couple of the many instances where the “research” was incorrect, so the fact that you helped him doesn’t really impress me. Once again, the misspelling of my name shows your lack of attention to detail.

    I did not see where the WSJ article connected anything. You and Barry claim ther is a “connection” because the institutional investor invested in PPL and Madoff. That institutional investor also invests heavily in Treasury Bonds and NASDAQ stocks and Madoff used to be chairman of the NASDAQ. If you are claiming that “connection” makes PPL a scam then you are also saying that Treasury Bonds, NASDAQ and all of the NASDAQ companies are scams. That article and your response to my comments on it are just another example of trying to spin nothing into something.

    Yes, he did serve his time and did admit to it, but that doesn’t mean he’s not still full of crap. He is still running a “short and distort” scam and when you look at the big picture his “evidence” is really weak. If he’s really out to help people then why doesn’t he start a non profit and seek grants and donations? Why are there only publicly traded companies that he holds a short position in on his website(s)? Why was he not warning consumers about banks and insurance companies over the past few years? He claims that FDI is an investigative company. Kroll is one of if not the top investigative companies in the world. They are used by many governments, including ours, and companies throughout the world. According to Wikipedia “Kroll began its trademark line of investigative work in the financial sector in the 1980s, when corporations in New York City approached Kroll to profile investors, suitors and takeover targets, with special attention to any perceived connections to disreputable organizations, suspicious business practices, personality and integrity issues, or any kind of corporate malfeasance. Kroll developed a name for itself as Wall Street’s premier “private eye”.” Kroll uses PPL to market their ID Theft Shield. Don’t you think that maybe Kroll just might have investigated PPL before doing business with them. They are also much more reputable than a “short and distort” scammer.

    It amazes me. What I’ve learned over the past year is that most of the people out there claiming to help and protect people from fraud are actually frauds themselves. I hope Barry cuts you in on the profits from his scam or at least lets you in on who he’s going after next so you can get a piece of the action.

  8. Tracy Coenen

    Hi Johnathan – Just a few comments on the silliness you posted… You’re asking me to provide you with other sources of information about PrePaid Legal. I’d be happy to do that, but require a retainer before doing work for you. If you’re interested in retaining me, please get in contact with me directly to work out the specifics.

    Calling me a “co-conspirator” sounds cute, but there’s no substance to back that up. Yes, I have researched, investigated, and reported on Barry Minkow’s engagements. Everything I ever produced was truthful. There’s no conspiracy other than one to reveal the truth about this company.

    No parts of the report that you’re referencing in your preceding comments were untrue. Nothing has been distorted. No lies have been told.

    All of your so-called rebuttals above either lack substance, are completely wrong, or have nothing to do with the portions of the report you reference. I stand by that report as 100% truthful and accurate.

  9. Jonathan

    I’m glad you stand by what you write, but where’s the credibility? PPL has credibility. They have a ton of credible people and publications behind them. As I mentioned in my first reply all you have is an ex con and a handful of whiners who thought they’d get rich overnight with no effort.

  10. Tracy Coenen

    Well Johnathan, I guess our idea of credibility is different. Most lawyers that I know think Pre-Paid Legal is a huge joke. Marketing pieces by PR hacks don’t really count as “publications.”

    I don’t need for you to deem me credible. I’ve got several hundred successful fraud investigations under my belt, and my knowledge has been demonstrated in the 100+ articles I’ve written on fraud, along with the 2 academic books I’ve published. (And a 3rd one on the way!) Thankfully, the people who really matter think I’m quite credible.

    Thanks for participating in the discussion.

  11. Chris

    So you have totally missed the BOAT. Any one can write a book and a report and post it some where like here I am writing something. But what are your endorsements by the US Chamber of Commerce, BBB, SEC, NYSE, do you have four Attorney General’s, or parts of the government of Oklahoma, A NFL Hall of Fame player for example, who are card carrying members and Endorse PPL. The creditability of PPL is all irrefutable and from LAW Makers and Government Officials with a reputation.

    What ENDORSEMENTS do you have for YOUR creditability? Why not list them? Because you do not have any creditable to support your credibility otherwise it would be a no brainier.

    PPL is a lot like Mary Kay but unlike Mary Kay you do not have a inventory to maintain. And the Promotional tools that you CAN buy from PPL are less then 1.00 per. Buy one disk or 100 disks at 1.00 per DVD. Most scams have a hefty inventory to invest in. PPL, Mary Kay AMWAY are set up like Mc Donalds so I guess Mc Donalds is a SCAM being a franchise. You are not promised millions you are promised that you get what you work for. If you do not go out and educate someone then you wont make anything. Just as the Car Insurance industry or any Insurance Industry was back in their infancy. Sales people would invite someone to get insurance for health, car, dental, or home and most people would exclaim why do I need that I have never been in a accident or the hospital my house has not burned down or been robbed. The one thing that PPL does that other PRE PAID INSURANCE will not do is cover existing problems.

    Let me ask you a question if you cancel your Car Insurance and get in to a accident and then call for insurance will you be covered?

    What if you are deemed Criminally Liable?

    Well those are kinda unfair but I know you like unfair. The first one you have to be a member for 15 days for the coverage with PPL. and the 2nd one YOU AUTO will not cover you. CHECK IT OUT. PPL covers you where the insurance company drops you.

    But to be fair say it was you home burning down. vs. some one suing you for a unpaid bill that was ID THEFT. You would not be covered if your Home Owners was lapsed you would be out. PPL takes care of you and you have access to attorneys to get the problem fixed.

    PPL is what PRE PAID Insurance is. You have to pre pay for all the insurance you use you do not get to use it and pay later. You pre pay for cell phones and you have a 2 year contract that renews each time you upgrade with another 2 years. PPL is a month by month if you do not feel you are getting what you deserve you can cancel and we offer you luck in your life. You really need to DO research in to the product provided because you are so missing the boat.

    I have used this many times when someone has wronged me and I have won each time. I pay 35.95 a month and the Law Firm makes 1.4 Million a month here in TX regardless if they get a call or not and this is repeated across North America HI and AK including Canada. As an associate Jr they would make 34.95 one a membership paid BY commission from the home office. A Scam depends on getting the “Marks” money to pay the person not the company or its Providing LAWYERS.

    The lawyers you are refering to must be the ones on the waiting list or the one that CAN NOT make the cut to be contracted per year (bad standings with the US or State Bar association, only being around for a year or so just for some requirements), or the Law Firms that were Black Listed because THEY breached the agreement with PPL which is when PPL did some house cleaning and canceled contracts with LAWYERS and FIRMS because, you need to sit down for this.

    LAWYERS do not do what they say they will do and LIE.

    Wow I am sure you will find a problem with that statement.

    That caused the entire business plan to be reviewed and found flawless by several outside reviews, then the Law Firms were reviewed and now are monitored Electronically and if there is a problem the “HAMMER” calls and set the Firm straight or the FIRM looses their contract permanently.

    You need to check out the product and your sources. Haters are everywhere and lots of them are under your nose.

    It is illegal to undermine a companies stocks and a company can sue you civilly and personally for your statements made. Freedom of speech is becoming more transparent in these times with all the SCAMS that are being prosecuted.

    Every example you credit as a scam is normal practices on the NYSE and NASDAQ so by your definition every single company (Best Buy, Circuit City, Mc Donalds, Wendys, Microsoft, well I can not type every company ot there) are all scams. Best Buy offers a warranty and does not want to honor it. They tell you to send it in on manufactures time but when it has a 4th problem on the extended warranty they need to send it in 3 times before they will honor the replacement even when you show them the previous 3 repairs. That is a SCAM. PPLs product works 100% of the time now you may not like the answer because you have a frivolous lawsuit but hey if you like paying $500.00 for a hour of consultation asking about it where it is included in the fee for membership for me then that is your pleasure. I would rather pay wholesale then retail for my legal defense. And having paid $300.00 a year to retain an attorney that makes $16.8 Million a year (conservative) sounds like a great deal to me. 25% off court time and having 335 pre paid court hours after 5 years of membership.

    I can enable my Myranda Rights at 3:00 am on a Saturday to get aide from an Attorney if detained or questioned by a Law enforcement officer, if Child Services tried to take my son away and other issues. Do you have a lawyer that will do that for you for $35.95 a month?

    I put a website for you to look at so maybe you can see and to educate you since Associates are only educators not sales people if you can not find value in the product good luck in your life events. Please take a look at it and if this looks like something for your life’s events then we can talk and if I can not answer the questions I have an expert Judge McCoy who would love to talk to you and help answer your questions.

  12. Chris writes: “I can enable my Myranda Rights at 3:00 am on a Saturday to get aide from an Attorney if detained or questioned by a Law enforcement officer, if Child Services tried to take my son away and other issues. Do you have a lawyer that will do that for you for $35.95 a month?”

    Uh, paying $35.95/month is not going to get your criminal attorney out his/her warm bed at 3:00 am on Saturday.

    Many of PPL services could be obtained in far less costly ways through legitimate insurance.

  13. Larry

    I have followed PPL for many years and have read every 10-K and 10-Q that it has published since 1999.

    While very few people keep their membership for long (50% cancel within 1 years and over 80% cancel within 5 years), the value of having a membership is a value judgement. Owning a PPL membership is just like people who feel that it’s worth spending over $4.00 per day buying a coffee drink at Starbucks (although, I imagine that Starbucks doesn’t lose half of its new customers within a year and over 80% within 5 years).

    Since PPL loses ovwe 1/3 of its total legal memberships every year, and since most existing associates either don’t sell anything, leave, or only sell a few memberships. PPL has to recruit over 100,000 new associates every year to sell memberships and to buy their own membership as a way to be vested for commissions. New associates also make up the largest number of associates making any sales!

    PPL’s 400,000+ Associates account for about 1/3 of all legal members, while group members account for only 1/4 of the membership, So, not only are associates the people who are selling PPL’s memberships, they make up PPL’s second largest market for memberships.

    PPL has had decades of experience to see that almost all associates fail, but it sees that they are also the reason the company is so profitable, but as time has progressed, PPD has seen its membership sales and membership retention fall, in spite of the fact that there are over twice as many vested associates than just a few years ago.

    PPL’s leaders see the decline in growth and know the effect that it would have on PPL’s share price, so they embarked on a plan to buy back hundreds of millions of dollars in stock as a way to keep the price from falling. 10 years ago there were over twice as many outstanding shares and the stock price was trading in the $30 range, and PPL’s market cap was around $800 Million. Since that time, PPL has bought back over half of the shares and the stock price has stayed in the range that it had in 1999, but even after spending over $400 million on buy backs, the company’s market is down by $500 million!

    Like a Ponzi, PPL sucks in hundreds of thousands of people who almost all fail. They pay to become associates, buy memberships and some even sell some memberships, which creates a profit for the company PPL takes the profits and spends them on share buy backs to keep the stock price up. It just so happens that PPL’s CEO and a long-time board member control over 25% of the stock! They benefit because the stock price doesn’t go down by 50% as would have happened if there were twice as many outstanding shares. This is almost totally funded by the memberships sold to and made by new associates.

    Are the number of active legal memberships growing? Is there a growing number of producing associates as each passing year goes by? The answer to both questions is “NO!”

    PPL is operating a massive Ponzi-like, endless-chain recruiting scheme to cover-up the fact that huge numbers of members are leaving, that there are extremely few long-term producing associates, and as a way to feather the beds of a couple PPL board members.

    Stop the massive recruiting scheme, and watch PPL implode. The 10-Ks prove it!

  14. Joe Adams

    I watched a friend buy leads from “greatlegalleads” or some outfit like that. He paid hundreds of dollars for these leads and diligantly worked them, working far more than 40 hours per week and more like 80 hours a week. He has hundreds, if not thousands of emails to show for it. This person is a professional telemarketer as well as has worked as a manager at a company that has been in business since the late 1950s. He also networked, recruited, visited employers, paid large sums of money to prepaid legal’s approved vendors. He spent himself into bankruptcy and had so many chargebacks that he can never hope to make any money at prepaid legal. He quit the business and went to work for a professional telemarketer again where he was quickly moved into management training and has been working as a manager and they actually pay commissions. He had no trouble selling and making money for this established company after quiting prepaid legal.

    When he sold a prepaid legal insurance policy, prepaid legal wanted the checks overnighted by UPS and they immediately deposited the checks. When they owed my friend money in the early days before the chargebacks started, not one time did they pay him the commission on the day he earned them. (PONZI???) It was sad as he always expected deposits that would always be 2 or 3 days late. He would talk to his upline who recruited him and he would get the standard answer, “they just have so many applications they are behind.” They certainly were not behind on depositing the checks or taking the money out of the bank accounts, just on paying commission when they owned them. Of course the business model in which he the primary incentives were not for selling the product, but recruiting new members, he soon had massive chargebacks and after bankruptcy, quit the business.
    He had no trespassing signs at his home which I also own, however, two associates visited the home univited without having any type of conversation with him in the previous several months. They did call, but did not leave a message on the telephone and in fact, never would leave a message when they called. I own the home as well, and I had to complain to the company to keep these people away from the property.
    If you have ever seen the “king of the hill” episode where Peggy was duped by a MLM scheme you can get a fairly accurate picture. I would not call the behavior of these “recruiters” stalking but it was certainly unprofessional and they act very desperate. I wonder if desperate is as desperate does?

  15. What truly amazes me is the blindness of this website as a whole. I think the most profound saying anyone can every understand is: “You only find what you look for.” Your site is dedicated to finding the faults, failures and dirty little secrets of everything and anything business related. This means that all you’re going to find is people who claim it’s a scam. The best part? You haven’t even tried it yourself.

    That’s like claiming that Chocolate Milk is the most disgusting, unsatisfying consumable product you have ever come across, but you’ve never so much as sipped the stuff. Little hypocritical no?

    I really don’t want to waste time drudging through the walls of text you claim provides evidence to your accusation or provides the opposite (Granted I’m surprised no one mentioned that Oprah Winfrey endorses PPL which is damn right foolish to argue with).

    In the world of business, especially independent entrepreneurship, you can’t expect that someone failing to succeed in a system makes it bad and that the majority of participants failing makes it a scam. That’s just plain life. Most people suck at running a business and they need to just accept that reality. The issue with PPL is they actually make it TOO easy to make money thus people don’t respect the opportunity. If PPL charged $10,000 per buy in, you better believe that everyone who participated would be stone-faced serious about it, but when it’s a cheap as $249 (And I do say cheap) it’s taken for granted.

    Like in ANY situation, the more you pay for a product the more likely you are to have confidence in it if it delivers. PPL clearly delivers on their product, but the people who sell it aren’t delivering on their work ethic. America is the laziest nation on the planet folks. Of course we’re going to try to scam PPL into giving us money. That’s the mindset of everyone who joins! “Hey look, easy money! Let’s get it before it disappears!” Why aren’t you writing an article on the every-day consumer who’s ultimate goal is to make money and often without regard to where it comes from? If you replaced drug-dealing with PPL marketing teams I doubt you’d be complaining, but you don’t have an article on drug-dealing being a scam.

    Sure it’s “obvious,” but when a program states in very simple terms: “We charge $49 up front and $35.95 a month for every month after that for our services and your right to sell memberships. If you do absolutely nothing but sell 1 membership a month (2-3 in the first month for sign-up) without any recruiting, you make a $34.71 commission for the year. So sell a membership a month and you only spend a $1/mo for our services.” Does that not seem like a fairly reasonable request? You aren’t required to sell a minimum each month, and something that wasn’t explained was that PPL never takes money from your account after it’s put there.

    PPL pays an advance commission on service plans – one year worth of monthly membership commissions are paid upfront. Canceled memberships are simply removed from the next paycheck (PPLSI will not reach back into your personal account) meaning that if the sale doesn’t stick, just replace it if you’re that anal about it. After the first year a percentage of each membership is paid to you as a residual commission. What isn’t additionally explained is that PPL doesn’t take the full amount back. If the sold membership is canceled after 3months they deduct 9/12ths of your commission from the next sale. If 6months, 1/2 and so forth. So even if they don’t last the full year, you still make money. After a year, you will never lose your commission, you’ll just make more for making the connection.

    Something I will agree with is that the tools they sell to train new members is definitely bothersome. Some folks get caught up in believing they need every single training book, class, instructor before they apply the method and find by the time they actually start selling, they’ve wasted months of time and money. Then they assume it means they’re failing because they didn’t make back months of inactivity in a week. In reality, you only need 3 things to be successful with PPL: a membership, a team for support, and one marketing book. “The Guerrilla Marketing Handbook” is one of many I use (because I own several businesses in addition to PPL sales) to understand how to SELL a product because that’s all this is: learn the product, discover how to apply it to a niche of people and then sell it.

    The bottom line is there is ZERO liability and NO obligation. That is the catch. It’s entirely up to YOU to make it profitable, they only ask that you pay for the opportunity to get on the bus.

    And yet you don’t even know what the bus looks like. . .

  16. Tracy Coenen

    Hi Christopher – You may have noticed the title of this site is Fraud Files, hence the focus on companies perpetrating fraud. I’m not sure what’s objectionable about that, but as a consumer, I’d think you’d like someone to be looking out for you and investigating these things.

    As for my experience (or lack thereof) with PrePaid Legal… How would you know what I’ve experienced with them and what I haven’t? Further…. I don’t have to actually have cancer to know that it’s bad. Same deal with these MLMs. I don’t have to buy their trash or sell their trash to know it’s trash.

    And endorsements by Oprah Winfrey mean nothing to me. (Aside from the fact that she does NOT even endorse Pre-Paid Legal. LOL)

  17. Patrick

    If one makes up one’s mind on the legitimacy of Pre-Paid Legal from the above discussion, it would be crazy to assume it’s legit. This stems at least in part from the level of literacy of the submissions. The people who sound like they have critical, analytical minds, and who paid attention in English class, all find great fault in this shady outfit. The illiterates seem relatively positive.

    Thanks for your clarity and level-headed analysis, Tracy!

    As long as we have naive people, we will have those who prey upon them. Educate yourselves, America!

  18. Diamond

    Tracy et al:
    What do you think about The SEC subpoena served and executed upon Pre-Paid Legal today, and about PPL’s Press Release announcing this??

  19. Todd Nuccio


    You say that “Everything (you) ever produced was truthful.” I applaud that in anybody who truthfully means that. Still, truthfulness is one thing. Meanness is another.

    Frankly, purposely misspelling Jonathan’s name repeatedly (as Johnathan), disregarding Jonathan’s valid points, calling MLMs “trash” (as a broad generality), and being “tickled pink” about the SEC subpoena proves that you are, at the very least, an ideologue, and at most, an unprofessional attorney (unless you are misleading us with your “interested in retaining me” comment) who is obsessed only with winning rather than telling any truth. And I’ll prove that later. In fact, your flippant retorts are nothing more than a revelation of your starkly clear, furtive intentions. You support your meal ticket (Barry).

    As for the SEC investigation (or “fact finding”) of PPL… I have no clue where it’s going, but if Barry’s assault on PPL is found to be misleading, self-serving or frivolous; I hope Barry gets tossed back into jail for good.

    My final point is, Tracy, if Barry is proven to be profiting from his attack on PPL and is convicted and thrown in jail, would you still be “tickled pink” about the truth? I’d love to see you “produce” the truth on this answer. Maybe you’ll simply say, “He won’t” so you won’t have to deal with the truth.

  20. Tracy Coenen

    What is mean about telling like it is? MLMs are trash. They prey on innocent consumers who really don’t know any better. They take billions of dollars away from families with false promises. That money could be used to feed their children or create a college fund. Instead, the money goes into these unethical models (not “business” models, by the way) and it is a total waste.

    I’m not an attorney, but I am still tickled pink that the SEC is looking into Prepaid Legal. It’s about time they did. I know for a fact that Barry’s “assault” (your word, and a false characterization) on Prepaid Legal is completely based in fact.

    I know what the truth is, and I’m always tickled pink about it. It’s a beautiful way to live my life.

  21. Todd Nuccio


    Firstly, my use of “assault” was not the “legal” definition as you assumed. Secondly, all MLMs are not “trash” just because the potential member is incapable of saying no, or because they cannot sell the MLMs product. Why not outlaw all television advertising? More people are influenced by T.V.’s subtly mesmerizing ads than all MLMs combined. Instead, why don’t we all become more sophisticated consumers? How about personal responsibility?

    You seem very smart Tracy, but you also seem to be using the “throw the baby out with the bath water” argument. If you’re consistent here, then you likely believe in the zero tolerance policy at schools. Suspend a kid for bringing a plastic knife to school to spread the jelly on a cracker. If there is one bad person, then we should punish everybody. I don’t believe that, nor will I ever. We should only go after the bad guys (or girls, to be fair).

    That said, I do believe that if the “management” of any MLM is “endorsing” deceptive means in order to sell their product, rather than a few rogue members lying to get sales, we’re in total agreement about taking that company down. And if Barry has unequivocal evidence that Pre-Paid Legal’s management has endorsed lying to its members (whether overtly or surreptitiously), they deserve to suffer the consequences.

  22. Tracy Coenen

    Todd – You’re trying to put words in my mouth, and I won’t accept that.

    I didn’t say you used the legal definition of “assualt.” I said you used the word assault in a way that was an unfair characterization of Barry Minkow’s work. I stand by that.

    I didn’t say MLMs are trash because “the potential member is incapable of saying no.” I said they’re trash because I believe they’re trash. The owners and executives of MLMs are getting rich by peddling crappy products at inflated prices which are really no more than a “front” for the real business which is endless chain recruitment. People have a 99% chance of losing money in MLMS, and the owners and executives of the companies are getting rich at the expense of those recruited.

    I didn’t say anything about throwing any babies out with bathwater. In the last 5 years that I have been actively researching MLMs, I have yet to find even ONE that isn’t an endless chain recruiting scheme. I have yet to find even ONE that is really about selling a product instead of recruiting. I have yet to find even ONE that presents all relevant numbers and information to potential recruits. So the fact still remains that I haven’t seen an ethical MLM in the last five years. This has nothing to do with zero tolerance in schools, and your comparison is invalid.

  23. jhon

    hi, i want information about your investigation, now a days i am working on one nfa regester firm ,who is illegally getting the million of iranian clients mony in dubai,thy have dubai office and colleting the mony from iran and some taliban also,
    i want to complaint of this company and want to send all details and case file
    kindly guide me how i summit this case
    With regards

  24. Pewaukee Man

    I live in Pewaukee Wisconsin in what I felt was a peaceful area. We have a family down the street from us that is involved with Pre-Paid Legal. This woman is so involved with it that she had the service painted on the side of her mini van.

    The type of people doing Pre-Paid Legal really need to be watched by law enforcement. This woman is a fantastic reason why. This woman wouldn’t know the truth about anything, even if it had concrete knuckles and punched her right in the mouth. She’s a born liar. There are other things about her too. She’s just no dam good.

    The first time I saw her van painted up for Pre-Paid Legal, the hair stood up on the back of my neck. This told me exactly what Pre-Paid Legal was all about, just by seeing what kind of people are involved with this activity.

    I’m honestly don’t understand what is happening to our society.

  25. AlleyAwareConsumer

    During the course of the holidays when there is nothing to watch on regular TV I have been watching shows such as AmericanGreed and others on CNBC. I have always considered myself well informed and a very aware consumer of meager means which means I have to be cautious with my pennies, what I have realized in the past few weeks is that I must be in a minority. I am amazed at home many people will risk all they have on some scam that makes money for a slight few while ripping off the majority who want to believe in something. Pewaukee Man made a very sound statement when he said that his neighbor is the type of person we need to watch out for. I have met around 15 people who have signed on with prepaid legal as reps or whatever they call themselves, none of them are making money for themselves but all of them sound like they have been brainwashed for years! somethings that come out of their mouths really amaze me, such as “they are a publicly traded company”, HELLO, there are a lot of scam companies that are “publicly traded” until they are caught, dont these people watch the news or read the papers? I actually got into a conversation with one of these people when I heard him tell someone that he represented LEGAL AID! I explained that he was committing fraud by telling people he was with Legal Aid since they were a non-profit organization that is there to help people with free or nearly free legal services and that is not what he was doing. He had a notebook of all his leads with all their vital info, names, birthdates, addresses, credit card or bank info, everything anyone would need to commit identity theft on all those people. People need to wake up! For years now there are warnings all over about not giving your information to people haphazardly yet people still continue to do so. As far as Prepaid legal goes, their target market beyond anyone that will be dumb enough to sign up and pay them money is low income, under educated individuals, not only to become members but also to become Reps to sell the services. Come on People, this is not rocket science! The first and best way to make money is to protect the money you already have! It is no wonder our country is in such a terrible situation. Thank you for all your hard work. You should be featured on the 6:00 pm news rather than lost in cyberspace, but I am glad to have found your blog.

  26. AlleyAwareConsumer

    LOL, I looked further at your Blog and now I see that you are not just hidden away in cyberspace! Good to know you are on the look out for all of us!

  27. Doo Dilly

    With the FTC and the SEC on their back, and ever declining sales, PPL has been pushing hard to stay above water. They continue to prop up their stock price with company repurchasing. They “partnered” with Blastoff Network (an MLM shopping portal that’s “free”, unless you paid to get in early through PPL) in an effort to increase associates. To some degree (quantity unknown at this time), they had some early success. Facebook and Myspace were spammed with the “next viral Internet sensation”, but BO is fading fast, and I suspect they’ll lose a lot of the new associates sooner rather than later. The recession is helping PPL and all MLM’s recruit–and I’ve seen many stories of educated people falling prey to the cult like recruiting tactics. Unfortunately, it’s the folks who can least afford it that get hurt the most.

    Mr. Minkow, Mr. FitzPatrick, Ms. Coenen and others have been reporting on this company for some time. I, for one, am hoping that the FTC and SEC will finally provide “Justice for All” (who have been hurt, that is).

  28. Kareem

    It just amazes me how a person who feels a company is legit, would somehow find themselves on a blog titled fraud files. Not only will they find themselves here but feel compelled to write paragraph after paragraph DEFENDING such a company. If I had a such an unbelievable product and I stood behind it 100%, my only defense or rebuttal would be ” Try my product, it really works”, this is not the case here. These statements do not seem as if it is from a consumer but someone who has something to lose from these terrible companies. Scam or no scam the truth doesn’t need pages of defense. There is a valid reason why 50% of PPL’s members cancel after a year. For many MLM companies, their best line of seduction is, ” You may have a job but you are working for someone and making them rich”. Yes true, but guess what? Unless you are the owner or executive of any company, YOU are working for someone and making them rich. PPL is not exception. When you buy your cheap salesman suit from that dept store you are making someone rich. Having millionaires to parade around at your meetings to influence weak minds does not make your company seem legit or ethical, in fact it seems tacky, like that suit. There will always be suckers, I have been one, I’m sure in the future some great trick will bring me down again, but PPL gets a ( D- ) for having no originality in there scam-ish ways. I encourage all who want to be successful in life and financially set, I know we all do. Get an education, be original, do research, start your own business, create your own ideas and do not follow behind false promises and someone claiming to be rich and willing to share the secret. Hell, if I was rich I wouldn’t tell my secret. You can’t be rich if everyone else is too!.

    Tracy, I love to read your comments, sometimes they crack me up, you’ve saved me from many mistakes and I thank you very much for your work.

  29. John Jansen

    Stands to reason, honest legitimate people and companies always get attacked by incompetent people who don’t have nothing going for them. Jealous of honest success.

  30. Shaun Lunk


    why don’t you try the “MLM TRASH” before at least condeming it?
    You have ALL this time on your hands to reply and comment back and forth about how ILLEGAL PRE-PAID LEGAL is, pay the nominal fee and maybe try it for yourself.
    Quit posting this BULLSHIT.
    have a nice day,
    -Shaun Lunk

  31. Shaun Lunk

    i’m sure you have enough time to do so and make enough money to support the nominal fee, let us know how it works out for you…

  32. Chris Hancock

    The fact that PPL delivers on its product and promises is missed and I write as a ten year consumer of PPL,. A scam is a lie and I was not lied to when I purchased PPL. I am surprised that it is an MLM company and I was never asked to be an associate, so I do not know from experience that side of the company. I do know the need for legal services is real and I do not know of competing companies that offer same or similar services. People who join and cancel remind me of when car insurance was not tracked by the DMV with sr22 in California, people would buy and then cancel.

  33. Tracy Coenen

    Have you ever wondered why no other company offers this type of thing? Could it be because it is total crap???? I hope you never actually need the legal services you THINK you’ll get from PPL. I hope you’ve read your contract, because there’s very little provided when you really need it.

  34. June

    As a business owner, we were sued and lost over 100K because the attorney that our FRIEND referred to us was disbared and our friend did not know that either! Yes we should have checked him out but when friends refer them …then you think they are ok! So since this attorney was not a bar member, he took our money, pretended that he was doing his job, but we missed the court date since he never told us…so long story short we lost!!!! We talked to the judge to see if we could go to trial again and his answer was you should have done your homework on the attorney. So we had to hire another attorney and pay more money just to work out details with the plaintif. But if I had know about Pre-Paid Legal Service, guess what , we would never have been in that situation and lost 100K. AND to all the business owners out there…beware of your employees. Our ex-employee sued us for wrongful termination but he was doing illegal things in the store!!! So one court day missed and bad attorney cost us lots of money!!! So for $38.95 per month to Pre-Paid Legal is 100 times less than what I paid out. So guess what I am a member and I have already got my Will made for free that would have cost me $500 and it only cost me so far $38.95. AND I am ready if anyone else wants to sue us or heaven forbid anything we do causes damage to others and we would need PrePaid Legal again…but in case we do, I know they are one phone call away and do not need couple of thousand dollars that I would have to pay out at one time. This country is SO SO sue happy…everyone want to sue for something…they just want the quick bucks through the court systems and THAT IS WHY I HAVE PRE-PAID LEAGAL ON MY PAYROLL!!

    Oh by the way the attorney that lied to us is in jail right now serving time for a very long time!!

  35. Tracy Coenen

    June – I hesitated to post your comment because you are completely ignorant about what Pre-Paid Legal will give you in terms of legal services, and that makes your entire comment misleading.

    You would NOT have gotten $100k of legal services from Pre-Paid legal for your low monthly fee. You would have paid just as much out of pocket for those services even WITH Your monthly membership fee. Why? Because services that go beyond a simple phone call or a letter are NOT included in your plan. You pay out-of-pocket for the kind of services you needed in your lawsuit.

    If someone sues you, you are going to have to PAY for a lawyer to defend you. It’s not covered under the Pre-Paid Legal plan you’re paying for.

    There are all sorts of exclusions and limitations in the Pre-Paid Legal plans. Sure, you got a will done by them. Big deal. The REAL legal services you will need as a business owner will need to be paid for by you. And you won’t have any choice when it comes to the attorney you’re assigned.

    Pre-Paid Legal is not on your payroll. They’ve found a way to get people like you who don’t read the contract and understand what they’re getting (or more appropriately, what they’re NOT getting) to pay them a monthly fee. And if you ever need real legal services? Be prepared to pony up with no say-so over who handles your case.

  36. June


    I think you missed the whole point here. I lost 100K because I did not have a attorney who was legal. IF I had Pre-Legal Service at the time, then I know they are–most importantly a bar member becasue I don’t think PPL would hire non-bar members. 2nd, I would have gotten some, maybe not all answers to our situation. And if we did not get the coverage we needed from them like you said, but we would have gotten 25% off lawyer fees and managed to go to court and I promise you we would have won since we had proof!! And by the way what is up with attorneys who talks to you for 10 minutes about your case and 20 minutes of nothing and charge you 30 minutes!!! Do we have to keep up with all of our talking records and negotiate with them as well? PPL doesn’t seem to have time limits and does not bill you by the minute! And for you to say that I got my will for almost free is not a big deal? Wow you must have extra money just to throw away for attorneys fees..but I can do lots of things with $500!!. For the whole year payment for PPL was less than the Will fee from other lawyers AND I can cancel anytime so technically I can cancel today and paid out only $38.95 so hmmm I wonder who is losing out here?

    But what I do want to point out to you and some of the reader who is against MLM companies is that all business uses some form of MLM concept. Think about it…our company which is not a MLM, sales products in retail invironment. We pay hourly and commission like many many companies out there. The more sales the sales reps make, the more money the managers make and on up to the owners and company as whole. If they don’t make the sale, the company loose money and so forth and so on. So what is the difference between that type of company and MLM? EVERY Business out there is to make money or they would not be in it. They need the legs (sales people, marketing people, merchandisers and so on and on) to support the body. But the difference is between MLM and regular business is …. regular buisness takes lots and lots of money to start up whereas most MLM companies start ups are very minimal and almost any person can start their own business doing it IF they work hard at it. I know someone who sells Arbonne (lady I get my skin care from) started with nothing , I think maybe $200 dollars to get started and is a regional director now after 3 years makes over 100K plus per year working her own hours. I wish I had that luxury… I work retail hours. She worked hard at it so it’s not a get quick money scheme…you have to work for what you want to get out of it just like any other job! So please let me know what’s the difference??

  37. Tracy Coenen

    June – You clearly have no idea how the legal system works. And yes, it’s your fault for not checking whether your lawyer was even licensed. Pre-Paid Legal adds no value in that regard.

    I’m not saying the will has no value, but it is of virtually no cost to Pre-Paid Legal and is used simply as a tool to lure your into their plan…. so you can focus on that “free” will and not on the fact that there are very few other services you will get for your monthly fee.

    That supposed 25% off legal fees is worthless as well. You’re going to get assigned an inexperienced attorney at a so-called discounted rate, but still pay tons of money for those services. And Pre-Paid Legal is not known for providing quality lawyers.

    Again, you clearly have no idea what your monthly fee gets you. It gets you almost nothing.

    And finally, the fact that real businesses have a hierarchy of people does NOT make it “like an MLM.” MLMs live and die by recruiting new people into the scheme at a bunch of different levels. Real businesses don’t do that. Their focus is actually selling a valuable product or service. Pre-Paid’s focus is recruiting people in with the promise of making money, when almost no one in the system actually profits. But Pre-Paid has already made their money with the sign-up fees, the marketing materials they push the recruits to buy, the “seminars” they push on the recruits, and the like. I will put money on that your friend selling Arbonne doesn’t make NEAR the money you claim she does. Ask to see her tax return. She’ll never show it to you, because like almost everyone else in Arbonne and other MLMs, she’s probably making less than minimum wage.

    I’m sorry you got suckered into signing up for Pre-Paid Legal. Save yourself a lot of money and cancel your plan now.

  38. Doo Dilly

    So June, how long have you been a PPL associate? If i purchase a product or some sort of insurance, I don’t troll around the Internet defending my purchase. Even folks that regularly write reviews of products or services don’t engage in arguments with the naysayers.

    If you simply enrolled in PPL as a member, why aren’t you telling us exactly what you’re getting for your monthly fee, instead of defending MLM’s? The so called “pyramid argument” of corporate/business America is a tried and true false argument that MLMers put forth. As Tracy has repeatedly written, it’s all about recruiting. The product or service is secondary, and usually mediocre or expensive or both, relative to the real world of goods and services.

    As Jon Taylor, of answers the question about pyramid shape vs. pyramid scheme:

    “It isn’t the shape of the organization that is important, but the endless chain of recruitment of participants as primary customers. MLM compensation plans require the climbing of a pyramid of participants in order to make enough money to profit to any significant degree. But unlike a corporate pyramid, in MLM and other types of pyramid schemes, virtually all of those at the bottom (the “downline”) lose money (some a lot of money), where in a corporation, those at the bottom at least get a minimum wage.

    Of course, there are inequalities of rewards in most business arrangements. However, in MLM, the leveraging of a downline of thousands of participants who invest and lose money – only to enrich the TOPPs (top of the pyramid of participants), creates extreme inequality. For example, a downline may average $50 a month (actually losing money after subtracting necessary purchases from the company and operating expenses), while those at the top reap thousands or even millions of dollars a month. Such extreme inequality far exceeds what could be considered a normal or equitable business arrangement. MLM’s easy money and winners-take-all appeal is more akin to a lottery than a legitimate business.”

    As to the low “startup cost” of entering an MLM vs. starting up a legitimate small business, that is on the recruitment script of every MLM.

    Methinks the lady doth protest too much…

  39. Joe Green

    I use to be a Prepaid Legal Associate in California. You get what you pay for in legal services.
    Prepaid’s sales literature and DVD’s make youc think you are getting a hell lot more legal services than you really get. Example: We will help you with any IRS problems you have. Small print: does not include schedual C where most problems are. I had a lot of complaints about attorney’s refered to by the California provider. These attorneys for the most part were charging a lot more for legal services than normal attorneys charge. There were times when I call the Attorney’s with the plan and I received wrong information.
    A friend of mine(a prepaid legal member) had an accident and was refered to a lawyer by Prepaid.This attorney wanted money up front to file a lawsuit. My friend want to another lawyer who tool the case for no money.
    The drop out rate for members that I had sold was very high. Therefore I had a lot of charge backs on commissions. Never really made any real money.
    Most county bar associations have attorney’s that offer 30 minutes of free legal help. These are experienced lawyers, not the prepaid legal ones with little or no experience. Use this service.
    If you want fraud Id protection use a service life Life-lock for $10 or less a month.
    Stay away from prepaid legal services, especially in California.
    Prepaid ‘s business model is to sign-up as many associates as they can and hope the will sell a few memberships to there family, friends and business associates.

  40. Fire

    Please explain the research you did to claim that they use inadequate lawyers… you have me curious as i know they use a whole law firm, its not just you getting referred to a single lawyer who may or may not know a thing about law… as you seem to imply, in fact they have a different law firm for each state and province, I’m sorry that the one you researched was poor quality, ppl has likely already gotten a better one for them, as well, each law firm has to have individual attorneys that specialize in a certain area of law. I have been a ppl member for several years, I got a will for both me and my family, plus a living will, plus not too long ago I had an issue when a piece of rock from a city construction project cracked my windshield, the city denied responsiblity, ppl helped me get a new windshield, and then there was a time when the fellow I was renting from did not want to give me back my damage deposit, it was a small sum, but I got that back too, thanks to ppl. You cannot say it does not work or is a waste of money, I am living proof it works and has payed for itself for many years. I was also at one time a rep for ppl, this is where I get my facts, its true I made little money and quit, however the fault for that is not with ppl, I am a busy person and never put any work into it, I was never lied to as an agent or a client.
    I’m sorry your experience was different Tracy

  41. Curtis

    Tracy, I can’t believe how far off the mark you are as it pertains to Pre-Paid Legal. You should spend some time… I chalange you to spend some time with The founder of the company, Mr Harland Stonecipher. Here is a man of tremendous integrity.

    Enough said!

  42. Doo Dilly

    First: PPL does not have one law firm/state; some serve multiple states; a state or two have more than one firm. See page 8 of their 2009 annual report, available on their web site.

    Second: while this article is from 2006, I would guess the only thing that has changed is the amount the firm receives from PPL/member:

    “The company’s challenge is to provide decent legal services to people paying just $250 for an annual membership, especially because only a third of that annual fee, roughly $80, goes to each of the in-network law firms, which are paid a flat fee per member, regardless of the legal services provided. You don’t have to be an attorney to realize that $80 doesn’t buy a lot of legal services these days, when lawyers routinely bill at $200 or more per hour. Pre-Paid’s solution is to limit benefits. When Pre-Paid members have a legal problem, they call a toll-free number that connects them with the private firm that handles Pre-Paid legal matters in their state. The law firm then determines whether the matter is covered under the complex Pre-Paid contract.”

    Third: Virtually every firm has a dedicated phone line for PPL members, and an appropriate number of lawyers dedicated to the members. If you think these lawyers are high up in the firm’s food chain, you didn’t read the above quoted article. Besides, most of the covered services are done by paralegals, as in many law firms. And there are a growing number of E-firms for wills and simple matters.

    I performed some rough calculations based on $100/member. The large firms are earning 200-400k/month for very little work, and generating referrals from PPL members for more substantive work at a “discount”. So it’s a cash cow for the big firms, as it has been for Mr. Stonecipher.


    “The story is company legend. In 1969, Harland C. Stonecipher, founder of Pre-Paid Legal Services, was involved in a car accident. The driver of the other car survived the crash. But, as Stonecipher later wrote in a corporate memoir, “I faced thousands of dollars in legal costs stemming from an accident in which I was blameless.”

    Stonecipher’s account of his accident leaves out a few details, however. According to his attorney at the time and copies of the suits obtained by BusinessWeek Online, he was the first to sue in court for injuries. He later settled. Meanwhile, the driver of the other car sued Stonecipher the following year for just a fraction of what Stonecipher had sought for injuries incurred in the accident.”

    I guess that depends on your definition of integrity…

  43. Fake Name

    The following point of view doesn’t include proper punctuation or grammer.

    I’m not much of a writer.

    Please feel free to judge my opinions. Be prepared that the majority of this post is going to be in favor of PPL with a couple of exceptions and a point of view that wasn’t expressed so far…

    I am an independent associate with PPL. I think we bring all of this negative on ourselves by recruiting people that are not qualified to market our memberships. We are at fault for this.

    If the argument is that PPL associates are not professional than I have to agree. When I attend a national event I am not proud of our level of professionalism in general.

    I disagree with several points made in this back and forth discussion.

    Someone mentioned that if marketing Pre Paid Legal plans was a good business we would have competitors. We do in fact have competitors. Visit which is the American Prepaid Legal Services institute website. They list multiple companies engaged in the marketing of a legal access plan. Various types and prices exist. You can argue which plans, prices or approaches make the most sense but you can’t make a case that PPL is manufacturing a marketplace for a service that no one is buying.

    Metlife markets a legal plan under the Hyatt legal plans name and ARAG markets plans as well. They are only marketed as group employee benefits. Metlife requires the company to have more than 500 employees and ARAG requires a group to have more than 5,000 employee to roll out the benefit.

    According to a quick look at the ARAG site they are claiming to have about 1 million members. Near as I can figure they are not a network marketing company so that means not one of the 1 million members were tricked into purchasing the plan based on promises of riches.

    The Hyatt legal plan site says they have 5 million plan members. I’m also pretty sure they are not an mlm company.

    They are listing AOL, American Electric Power, American Express, Deere, Home Depot, FedEx, PepsiCo, Pfizer, Ryder, Target and the University of Michigan as plan sponsors right on their website.

    The point I’m trying to make is that the legal plan industry is a real industry in America. Just because you don’t like MLM companies doesn’t mean that the legal access plan industry is bad.

    Of course you know there are dozens maybe hundreds of “identity theft” products in the marketplace now. You can argue whether or not it is a value to own a plan. I personally see the value and it is my money and I choose to spend it on this piece of mind.

    Next point … Recruiting… you can advance in the PPL compensation plan by recruiting. You can also advance by opening group accounts or by marketing memberships.

    Here is a quick overview of the current advancement options…
    Recruiting: Recruit 1 new fast start associate and move up to sr associate
    Recruit a total of 3 associates (one of which is a sr. associate) and you advance to manager
    Help your 3 associates get to manager and you become a director.

    I assume that is pretty standard mlm stuff but here is where your recruiting arguments fall apart:

    You can also advance by writing business
    Start at jr associate and advance to associate by writing 25 counters
    then move to sr associate with a total of 50 counters
    then move to manager with a total of 100 counters
    then move to director with a total of 250 counters
    A counter is a legal plan or ID theft shield plan. Most of our associates are marketing them together so a new member is usually two counters.

    There is more:
    Groups opened (marketing in the employee benefits arena)
    You can advance to manager by opening 3 group accounts
    You can advance to director by opening 6 group accounts

    I hope you are still reading at this point and I haven’t made this post too boring 🙂

    Another point made somewhere was making the associates own the product. I see both sides of this point. If I was buying a new car I really wouldn’t care if the car saleman owned a car. I don’t care if my next realtor is a home owner or rents an apartment.

    PPL requires you sell 3 plans a quarter or own a membership for vesting purposes. My personal opinion is that you shouldn’t get into this business to sell less than 12 plans per year and you shouldn’t be marketing this membership if you don’t see enough value in it to own it for your family. So either way you would be covered.

    The vesting requirement has a limit. I’m pretty sure its 60 months but I could be wrong. Meaning that if you do not own a membership but you do sell your required 3 plans per quarter for a total of 60 months that would lock you in to lifetime vested status. Don’t quote me on the time line. I know it exists but I’m not going to hunt down the exact figures at the moment.

    More personal opinion from me:

    I love the mlm structure of our company. I hate how it has been hijacked into a “one size fits all” opportunity.

    I’m focused mainly on group marketing of the plans. But because of the structure ppl has I can recruit other sales professionals from the employee benefits and other insurance type industries. PPL takes care of dealing with cutting checks etc and I can grow a professional sales team anywhere in the country.

    My team (downline and upline)does not have magnets on their cars. We do not hold PBR’s in our livingrooms to recruit our friends, family and neighbors. We don’t do that and we don’t teach that.

    I don’t buy the “we don’t sell we just share info” argument. I think this is a professional product that has to be marketed in a professional way (employee benefits) by professional people (insurance industry)

    In our team we are only looking for experienced sales professionals.

    We should never abandon our mlm comp plan but we should continue to look for the best salespeople. Train them right on marketing the membership and doing the proper activites that results in long term persistancy of our members.

    PPL has an amazing business model and because we can open a group with as little as 5 employees participating it means we can get out to the small companies all across america that aren’t getting services by Hyatt and ARAG.

    I’ll leave you with this:

    It is my opinion that American families will continue to purchase and use legal access plans and identity theft protection. I am going to do my best to make sure that they purchase it from me or someone in my sales team. I will accomplish my goal by sourcing great candidates and making sure they are the best trained in the marketplace.

    That is all we can do.

  44. Deanna

    I am online right now, reading the comments on this blog because I am trying to get throught to Mr. Stonecipher. I currently have the PPL membership, and have been a representative for the company. When I found myself needing to be defended and provided a PPL attorney, whom NEVER even spoke to me, but was the attorney of record on my case, assisted me in getting a default judgment. I have just days to try to appeal a recent decision to not grant my motion for reopening the case (basically).
    It was so disappointing that after I was so inadequitely represented, I was told by PPL upper management I would have to take my complaint out firectly with that appointed attorney. So I am being told I need to file a complaint against the company I have represented and have been so wrongfully been taken care of. I am basically going to need to file a Legal Malpractice Compalint againt PPL. How ridiculous is this? I am wanting to talk to Mr. Stonecipher, because like you, I have heard his story and believed him to be a genuinely caring individual. Can you get me his contact information? Do you think he will take time to hear from one of his associates?

  45. Prepaid legal is brilliant, but a SCAM. It is brilliant for it uses the same concept that most insurance companies use. It is called the “Orphan clause” simply put they recruit people to go hit their family and friends. This puts the customers who are in the friend or family category in a position for forgive any mistakes without some legal ramifications. Why? because most people will not sue a family member or a friend. Even if it is about the principal of the matter. Back to the Insurance companies. After they have milked some poor starter for all of his family and friends and he has a slump where he is not getting any business, they fire him and the contract states the customers belong to XYZ company. Now the agent is starting from new if he or she goes to work for another insurance company. the policies become “Orphans” which then are distributed to the favorite sales people and the brown nosers.

    From a business stand point it is brilliant but ethically it is wrong for it is set up to work this way. it is a pure statistical model for which they exploit everyone with promises of fame and fortune.

    I spoke to the Attorney Generals Office today in Salem Oregon and he suggested staring a class action lawsuit against the people that signed me up and the company in Oklahoma. Not a bad idea.

    My dissatisfaction comes from the attorney firm who is in Oregon are simply incompetent and could not litigate their way out of a wet paper bag. the attorney I dealt with was either drunk, asleep or stoned, or all three. He was barely coherent.

    Fact is this folks. You do not need an attorney. The only people that benefit from an attorney are people who are in fact guilty in a criminal matter. Civil stuff, both state and Federal can be fought by the parties. So what if they have an attorney from a big name firm? if it is BS it is BS. look up Summary Judgement on google and it walks you thru it step by step and if you have not done the things you are accused of, then you have no worries, for the Judges know BS when they hear it. It is initimidation like the school yard bully…” I am going to get someone to beat you up and you better be scared” it is the same mentality in court. The Judges know it. They see it daily and are tired of it. Most will say “grow up” and get over it and move on.

    So who ends up winning in this? both attorneys after some squabble over some petty issue ends up costing each party 50 grand. it is throwing good money after bad.

    PPL today told me that my letter to cancell my policy back in December due to not having a date stamp on it and having not sent it registered mail are now shafting me for 9 months worth of dues. They all themselves an ethical and honest company? I think not. They are scammers and I am now working on a class action suit which is juicy. Truth is they have been found guilty of fraud on many occasions.

    Some information, most states, such as Oregon require that the selling party who has taken your money be licensed, in Oregon it is a must and must have a license and or be an LLC. IF they are not and they took your money to pass it onto Oklahoma where the real criminals of PPL are sitting then they have violated state law, a small fine, but nevertheless it is breaking the rules.

    Surely this is not about money, it is pure principal. For example in a Federal case in Federal court the courts require that any mail be sent regular mail first class, grab an envelope, slap the correct postage on it and send it to the courts, if they do not get it, they let you know and you resend it. Not one item needs to have or be sent registered mail. This is a way for Oklahoma to scam people like myself who actually earn a living the honest way. PPL is a scam folks and their service is to service themselves.. the will thing is nonsense also as it is and can be done on a simple form in 30 minutes and yet the PPL providers sell it as a 500 to 700 service. LOL funny…. If you polish a turd you still have a turd.

    PPL then trains its distributors to hide behind ” oh we are a publically traded company and are all legit” well so was Enron, Bank of America, Tyco, and Goldman Sachs the number one reason our nation is screwed right now and they are still in business and we all know what illegal stuff they were doing.

  46. Joe doe

    Education. You seem to have…some… So I have
    One question to the author,
    What is your take on Harvard now teaching network marketing?
    Or is has our nation’s prestigious universities now turned into “ponzi schemes?”

  47. Joe doe

    Many prople touch upon that “it has to be illegal” or “it’s not fair”. I cringe at the thought that people in our free, capitalistic country say this. The entire point of having a capitalistic country is truly to have an equal opportunity for people to start their own business and create a future FOR THEMSELVES. Has our nation really been set up to bred to “settle” in life instead of trying hard and succeeding and truly EARNING a future? Our education system has been modeled after an old world Prussian system (which was set up to breed soldiers and people who follow orders. Anyone standing out and doing something new is “scary” or “illegal” because nobody knows how to utilize it correctly.
    Case in point: what business model was at first deemed “almost illegal” and would have changed the world as we know it today if it had been voted illegal? Guess what….McDonalds, subway, BK, TacoBell, etc….FRANCHISES WERE A FEW VOTES AWAY FROM BEING DECLARED AN ILLEGAL FORM OF BUSINESS. Thank god there were sensible people with vision in congress to allow a system that makes it easier for people to start their own business by utilizing a piece of a business that is already established as allowing the franchisee to be a business owner and WORK HARD and succeed. Network marketing is this new idea that is under scrutiny because people don’t like the idea of others succeeding over them even though they just worked harder and knew the rules and how to follow them.

    Ps – funny how all the posts stopped this past year now that this company is privately owned by one of the largest equity firms that have made companies big like Jenny Craig, LA Fitness, and was bought for almost $1BILLION….guess that pays a little more to the fact that these slanderous blogs are set up by people trying to make a buck off the fact that people love to hear bad news (80%+ of news coverage is negative, why? Bc people for some reason love negative news) by shorting the stock of public companies…..respond if you like, don’t post this comment if you find it “against the forum post rules” just don’t try to defend yourself when it’s clear time has exposed you. Time always tells.

  48. Tracy Coenen

    You’ve never heard me say Pre-Paid Legal is illegal or unfair. What you have heard me say is that the company defrauds people by purposely withholding key information from them, as well as by offering a system in which almost everyone will lose money.

    When Pre-Paid Legal went private, they stopped releasing financial information to the public. That is the main reason nothing else has been written about the company. (In addition to the fact that I have lots of other things and companies I want to write about.)

  49. Jane doe

    So is this a legit company or not becuae I see a lot of back and forth, what do you mean they stopped releasing financial information. And what is the key information they withhold, and how would they lose money? Just curious if they give you a lawyer near you to represent you, what do they hide and why was it in Forbes and also and finally is it legit or not because it’s so back and forth why are they still in business and when that charge you the $30 or so dollars do you even get the full benefit of a lawyer or not or is their something hidden?

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