PrePaid
Legal's 2005 numbers are in. Note
that 666,595 memberships were
sold in 2005, and yet net gain
in memberships for 2005 were less
than 70,000 (from 1,424,707 at
the end of 2004 to 1,490,847 at
the end of 2005). This means that
roughly 600,000 memberships were
cancelled in 2005. 242,223 sales
associates were recruited in 2005
(more than a 1/3 the number of
memberships sold) as opposed to
107,552 recruited associates in
2004. On the other hand, 666,595
memberships were sold in 2005,
compared to 599,929 in 2004. In
other words, roughly 135,000 more
assiociates were recruited in
2005 than in 2004, and roughly
70,000 more memberships were sold
in 2005 than in 2004.
This would seem to reinforce the notion that PrePaid Legal depends on a constant influx of new recruits to continue to 'grow,' and that the PrePaid Legal 'plan' isn't the 'unbelievable deal' that many associates tout.
Pre-Paid Legal Services Announces 2007 1st Quarter Membership and Recruiting Results
During the 1st quarter of 2007, new sales associates enrolled decreased 37.6% compared to the first quarter of 2006. Memberships produced decreased 2.2% and new membership fees written decreased 7.5% and our active membership base increased slightly by 8,368 memberships compared to the comparable period of the previous year.
PrePaid Legal Memberships Fall
Pre-Paid Legal Services Inc., which provides underwritten legal assistance for a monthly fee, on Monday said new memberships produced fell 2.2 percent in the first quarter.
PrePaid
Weathers Guilty Verdict
PrePaid has been found guilty of fraud in one of the many legal battles that has been dogging it for years.
PrePaid Legal Lawsuit victory
Mississipi lawsuit claiming that PrePaid Legal's service is an outright fraud has been dismissed.
Yahoo PrePaid Legal Message Board (stock info).
Rip Off Report on PrePaid Legal
Great source of differing viewpoints
Identity Theft appears to be a real Threat. Credit Card and Check fraud, social security number theft and even spyware and hack attempts (from typcal adware to computer virus' with heavy payloads) have become real threats.
Compare Legal Service Providers
My PrePaid Legal experience
In May 2002, I became a PrePaid Legal associate at the recommendation of a good friend of mine. During this time, Buck Reed and Shari Sharman, both of whom have a history with Equinox, were involved with PrePaid Legal. After attending a couple of meetings I decided it wasn't for me and decided to put my efforts elsewhere. I have never considered myself to be much of a salesman and figured my time would be better spent focused on my career as a web designer/developer. This webpage serves as my case study on PrePaid Legal's opportunity from a researchers point of view.
Lawsuits
Membership lawsuits
-PPL faced lawsuits in Alabama where former customers claimed that the service didn't do what it was supposed to do. These have been more or less dismissed.
TheStreet.com
-PrePaid Legal Faces two separate class action lawsuits in Oklahoma, where the company is based. One accuses PrePaid Legal of being a pyramid scheme
TheStreet.com
the other accuses PrePaid Legal of breach of contract
Earning Claims-
-In 2001, PPL settled with the state of Wyoming regarding exaggerating income claims.
Pyramid Scheme Alert
Securities Lawsuit
-PPL also faced litigation from
their own shareholders who accused
them of accounting fraud. Though
the case was dismissed with
prejudice, the SEC forced PrePaid
Legal to change them to change
their accounting methods.You
can read more about PrePaid Legal's lawsuits
in their own Annual
Report, starting on page
13.
Short Sellers
For those unfamiliar with the concept of short selling, it is the practice of investing in a company in a manner in which the investor actually gains by seeing the tock fall instead of rise. PPL's advocates have a tendency of blaming PPL's barrage of negative press coverage on short-sellers of its stock (as opposed to the actual content of the negative press). In PPL's defense, short selling is considered to be a questionable practice by many and there are plenty of abusive short sellers in the market. Read more about short selling
here.
My 2 Cents...
While I would never go so far as to call PrePaid Legal a scam, I do not see it ever reaching 'critical mass' (the point at which a new product catches and suddenly the market becomes a gold mine). Having worked in Advertising field for the last few years I can see how easily the young hopefuls buy it up. PrePaid Legal has been around for well over 30 years and has only now recently broken the 1.5 million barrier. Cancellations are an ongoing thing and they happen almost as quickly as memberships are sold, which is why you will 7-800.00 memberships sell in a year's time, yet only see memberships rise from something like 1.5 to 1.62 million. The sad truth is that PrePaid Legal services aren't an 'exciting new technology, barely about to make its mark.
Having said this, there are countless (though often seemingly unverifiable) stories of PrePaid Legal getting so-and-so out of a ticket, clearing someone of a controversial bill, and of course the 'free will.' And yet I think back to the last speeding ticket I actually fought, where I was cleared because the officer failed to appear in court, or the countless times I've called a company over a controversial bill or fee I received and walked away without having to pay it. I think about all of the free 'Legal Documents' software programs that allow the buyer (and whomever he/she shares this program with) to make any number of wills, and changes to thereof. Without the ability to study these situations empirically, it is impossible to paint a black or white picture.
So while I would hardly call it a scam, I would certainly not recommend the PrePaid Legal 'opportunity' and would be hesitant to recommend the service. There are indeed people making money in PrePaid Legal but again, there were people making money in Equinox. Always research and never base decisions on unsupported claims.
