I only started selling PPL last summer, but have enjoyed it and done pretty
well with it. My experience with PPL has been different from what's
described below. I'll insert my comments there. I've reset this in HTML to
allow my comments to be differentiated from Sue's. Please excuse me if I
don't keep responding promptly to these posts, I have witness interviews and
other out of office tasks this weekend.
Siedow & Associates Investigations
& Custom Legal Support Services
2629 Foothill Blvd. #262
La Crescenta (Los Angeles area), CA 91214
CA Lic. PI #22852
Need economical legal help?
Sent: Friday, April 01, 2005 4:09 PM
Subject: [infoguys-list] Pre-Paid Legal -- A Pyramid Scheme With a Catchy
Good day all. I've been reading the pros and cons and opinions of the
authors with serious interest. I've been following the PPL issue for quite
a few years now for a variety of reasons.
Pre-paid Legal (PPL) - what a concept. Scam, sham? I believe that
There are many large firms that offer pre-paid legal as a business perk.
However, the attorneys and insurance companies they offer are not part of
the PPL group as we know it and they (the big company pre-paids) are, in
fact, qualified attorneys.
The distinction between a legitimate MLM plan and an illegal pyramid scheme
as I understand it, is based upon the activity for which participants are
compensated. Generally speaking, a plan that compensates its participants
based upon actual sales to customers by the participant and/or their
is a permissible MLM plan. A plan that compensates its participants,
either directly or indirectly, based upon their recruitment of additional
downlined participants, on the other hand, is an illegal pyramid scheme.
I have only been compensated for sales of memberships. I have 30 + people
in my downline, but do not receive any $ for signing them up, only for
PPL has been around as a company since 1972, I believe. As each day goes
by though, I believe they are reverting more and more from a carefully
disguised legitimate MLM to an unlawful pyramid. It is usually just a
matter of time based on the available number of suckers, one of which is
born every hour, or so it's been alleged. Aside from the dollar amounts
the associates have to pay to maintain their associate status, it appears
in recent times that the
annual participation renewal rate has gone from 80% (1978) to 15% (2003).
In other words, in recent times 85% of the signed members have not renewed.
Couple that with the fact that many, many of them have sued and I smell
serious trouble on the horizon. Of the 15% who have been renewing, 90% of
that 15% are allegedly actual associates who MUST renew by contractual
relationship to continue to receive their compensation and benefits.
There are several points here.
First, we don't pay anything to remain an Associate, only to sign up. That
sign up fee is nominal, and includes training and materials. At the moment,
most people can sign up as Associates for $49. That include a 1/2 day
training, books, CDs, etc.
Second, I don't know the company's overall retention rate, and have no idea
where you got those figures. My rate is in the 90+% range, as is everyone's
whose rate I know. If your rate drops too low the company won't let you
sell. I believe that they cut you off at 70%, but I don't personally know
anyone who has fallen that low, so I'm not sure. As I stated earlier, my
friend Jim is now retired on $10,000 a month in residual income, after 4 1/2
years of 4 day work weeks. That's personal sales, not downline sales. I
don't see how he could do that with the figures you describe. He is not one
of the big company celebrities, but he is above average. I do know that
some not too bright part time Associates do not describe the product
correctly, promising things that aren't there. I've seen it on the lists,
and hasten to correct it. They probably have cancellations once the
customer sees that they didn't get what they thought they bought. That's
why the company discourages selling through conversation, preferring that we
use the CDs, brochures, etc. provided.
I'm not sure who's been sued, perhaps one of the above described Associates
who are not correctly describing the product. Of course any successful
group gets sued, as well.
Most Associates do have the plan, and of course it is encouraged, but it is
possible to be an Associate without having the service. I personally
wouldn't want to sell a product that I didn't believe in enough to use
The pending lawsuits are now countless. The SEC is now down their throat
for alleged accounting irregularities.
I have no information on this, so cannot comment. I'll look into it. Bill
sent me some stuff. FYI, their Annual Report and a ton of other financial
information is available on the website. HYPERLINK
I have a problem though with their contractual relationship with their
subscribers. Now mind you, I have never seen one of their contracts. I
my beliefs on the written opinions of the deciding bench officers
The contract is about a paragraph, just saying that what they're getting is
exactly what's in the membership description. It's super simple, month to
month. I'll email you an application (the list doesn't allow attachments)
and you can read it, but here is the contract as it is on the app:
I hereby acknowledge that on this date, I purchased this plan in the city of
________________________________ in the state of _________. By signing this
application I certify I am legally residing in the United States of America.
Applicant: I understand that the written contract sets forth the terms of my
membership, including any exclusions or limitations, and agree to be bound
by the same. I further understand that the company will mail the written
contract to me at the address noted herein within the next fourteen days. If
I have not received my contract within that time frame, I understand that it
is my responsibility to call the Pre-Paid Legal Home Office at
1-800-654-7757 to obtain a copy. The written contract, together with this
application, constitutes the entire agreement between the company and the
member with respect to the membership, and there are no agreements,
understandings, warranties or representations other than as set forth herein
and in the membership contract.
In Florida, any person who knowingly and with intent to injure, defraud, or
deceive any insurer files a statement of claim or an application containing
any materially false, incomplete, or misleading information concerning a
material fact is guilty of a felony of the 3rd degree.
Of course the membership details vary according to which you buy, and the
State of issuance.
Can there really be that many idiots, an excess of 1.5 million, who have
bought a "membership"? Why would anyone buy into a program that sells the
services of unnamed lawyers with unknown qualifications with no agreement on
what they will charge for something simple like a traffic ticket defense?
The courts have found that the PPL lawyers offer an alleged decent
"discount" charging around $375 an hour down from their alleged normal $500
an hour rate. Wake up and smell the roses. Even the late Johnny Cochran
did NOT charge $500/hour for a traffic related offense. The high end
attorneys on Wilshire Blvd.
charge between $250 and $350 an hour for their serious stuff. No one,
REPEAT, NO ONE charges $500 an hour for a traffic defense.
You're right, no one does. Traffic offenses are included in the membership.
I'll send you something describing the services. In CA our attorney firm is
Parker Stanbury. Check them out on Martindale.com. Many of our attorneys
nationally are AV rated. I spoke with a Partner in the AZ firm and asked
him some questions. According to him they don't allow any attorneys with
under 4 years experience, or with a single Bar complaint to work the PPL
I have attended a number of depositions whereby a party was represented by
PPL. I can tell you that each and every time it was pitiful. The last
one, just a few months ago, had the defendant admitting to committing
crimes with counsel seated right next to him who was obviously oblivious to
the fact that
his client was sitting there admitting the commission of crimes. Hooray
for our side.
I wasn't there, but you're probably right. As in anything, there are some
people more competent and bright than others. My guess would be that this
attorney was one that had to be retained outside Parker Stanbury, for
reasons of a conflict or some such. I have found that those attorneys are
much more variable in competence than members of the Provider Firm. I have
not had that sort of experience with them, and have used them literally
dozens of times. I've had one or two who are a little grouchy or slow, but
I just ask for someone else and they get corrected. Overall I've greatly
enjoyed my experiences with the PPL Attorneys. They've saved me a ton of
time, trouble and money.
One thing that I've been very impressed with is PPL's quality control. On
the rare occasion I've had a problem they are all over it, handling it
quickly and completely. To me that speaks more about the quality of a
company than how they handle things when all goes right.
In every MLM and even some pyramids there are some who make a small
fortune; some who make a respectable living; some who make chump change;
and, others who do not even recover their initial investment. I wish for
Vickie a former rather than latter and that she become wealthy with this
Thanks, Sue. I'm buying <G> Of course some don't make it. Many don't ever
even get started, due to their own inertia. I'm sure that in PPL, just like
any MLM (and by the way, I just HATED MLMs, until I found this one) some
people get all excited and sign up, or are pushed into it by unenlightened
Associates. I, and those in my group, have a policy not to sign up people
who are not motivated and whom we are not going to take responsibility for
helping. It wastes our time and energy, and does the new Associate no good.
The company, at $49 can't be making anything after the materials and
training. We chose to spend our time and resources on Associates who
promise a better return. There is never a guarantee when starting your own
business, which is what PPL is. We all have the same opportunity, however,
and I've found the company to be extremely helpful to those who ask for it.
Since the sale of one Expanded Family Plan (our basic), at the lowest level
of pay, is $75, and since you can become an Associate for $49, you'd have to
try pretty hard not to make back your investment, especially with the
current media blitz on ID Theft and Living Wills. I'm pretty new at this,
but I am also pretty vocal. I'm a single mom running a full time PI
business, and still managed to make over $1,000 on PPL last month.
As far as PPL is concerned though, I�m a firm believer in the proverbial, �
You get what you pay for�. I believe that the PPL is a sucker�s bet."
Seriously, I thought so too. I asked that aforementioned PPL Attorney how
they make money on these measly $26 a month memberships. There are several
First, most attorneys are taught to rack up billable hours. PPL attorneys
have more of a "Chinese medicine" philosophy. The plan is heavily front end
loaded, with a view toward prevention. They do all they can to keep us out
of trouble. You get unlimited phone consultations, a Will and Living Will,
document review, to begin with. If their help is required, they work
quickly and accurately. The more mistakes they make, the more time it costs
them, time they can't bill for. These guys really jump on it. I've never
before experienced an attorney calling me back within a few hours, sometimes
even during evening and weekend hours. The Provider Firm plan is what sets
PPL apart, and minimizes the vagaries of finding a good attorney, similar to
the employee benefit plans you describe above. We're a very popular
employee benefit. We were also recently selected as the Preferred Partner
in the war against ID Theft by the National Association of Federal Credit
Next, the attorney told me that they of course get referrals to non PPL
members, from satisfied members, and also take contingency cases like any
firm, so make money on those. Of course they make money on the cases that
exceed coverage or aren't covered. The plan doesn't cover everything, but
it does cover a whole lot for the tiny amount it costs. Check my site,
details on exclusions.
The attorney also told me that the membership money is divided very roughly
in thirds, one portion to the company, one portion to the Provider Firm, and
the other portion dispersed as sales commissions. In California I was told
that Parker Stanbury makes something like 1,500,000 or more a month just
from that. They of course represent other companies, a number are listed on
Martindale, but PPL covers a lot of overhead right off the top. They treat
me, when I call, like an important client.
I'm not saying that the company or attorneys are perfect, or that everyone
who signs up to sell will become rich overnight, but my experience overall,
and that of the people I know who deal with them, has been very positive.
Sarkis Detective Agency
1346 Ethel Street
Glendale, CA 91207
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