Nov. 19 /PRNewswire-FirstCall/ — Pre-Paid Legal Services, Inc. (NYSE: PPD) announced that on November 18, 2009, we received a proposed draft complaint from the Federal Trade Commission (“FTC”) seeking permanent injunctive relief, disgorgement of proceeds and other relief, including costs, relating to our Identity Theft Shield and Affirmative Defense Response System (“ADRS”) Program. The proposed draft complaint alleges our ADRS program and related materials violate Section 5(a) of the FTC Act regarding asserted misleading representations, express or implied. The proposed draft complaint also names Harland Stonecipher, our Chief Executive Officer, and Mark Brown, our Chief Marketing Officer, as defendants. We previously received a Civil Investigative Demand from the FTC on March 23, 2007 on the ADRS program. We have made voluntary revisions to the marketing materials originally provided to the FTC in 2007 and 2009. The FTC may decide to commence federal court proceedings with this proposed draft complaint. The ultimate outcome of the matter is not determinable but we will vigorously defend our interests in this matter.

http://www.prnewswire.com/news-releases/pre-paid-legal-services-announces-ftc-developments-70524402.html

Their stock is crashing. Average volume has been 100K, but today the volume is over 1M, and the price is down 20%.

“Oh what a tangled web we weave, When first we practice to deceive!”–Sir Walter Scott

Danger, Little Miss Muffet… and Humpty Dumpty…

http://www.legalmarketingblog.com/legal-fees-alternative-fees-vs-billable-hour.html

http://nysbar.com/blogs/Tipoftheweek/2009/08/changes_in_pricing_legal_servi.html

BUT: If I speak to someone at the law firm of, say, Dewey, Cheatem & Howe, I would expect to speak to a lawyer or paralegal about my needs, and receive a quote, perhaps with a caveat for unexpected fees, from the folks at the firm. The “associates” at PPL are MLM’ers who have been recruited to recruit more people under them. The product is secondary:

http://mlm-thetruth.com/

http://www.pyramidschemealert.org/PSAMain/home.html

AND: Some insurance is mandated by law (auto), or contract (mortgage/homeowners), or for catastrophic needs (health). Most of the rest is unnecessary and wasteful spending. I couldn’t find any unbiased reports on the need for legal plans, but I don’t believe many people REALLY need it. People use it if they have it, especially if they work for a company that offers more comprehensive plans as a benefit (Hyatt: http://www.legalplans.com/ ).

BUT: PPL’s other product (ID Theft protection) has been reviewed:

http://money.cnn.com/2005/08/22/pf/idtheft_0509/

MEANWHILE: Back to the Rancho chez Blastoff:

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_P/threadview?m=tm&bn=14512&tid=111826&mid=111826&tof=11&frt=2

I know for certain the BO hype successfully recruited a FEW Silly Wabbits into the PPL fold, but the hype is fading fast… at least until they start their massive media blitz, coming sometime in the next millennium. I heard it straight from the mouth of Walter Mitty himself.

http://www.cavalierdaily.com/2009/10/15/the-undiscovered-madoff/

You won’t be surprised at the Kool-Aid drinking commentators, but one brave lad nailed it with a football analogy:

“The great threat to PPD is the ongoing decline in their associate ranks. At present they are trying to throw a “Hail Mary” pass by linking up with a new online pyramid sales scheme(the soon-to-be-launched online shopping portal, “Blastoff”), but it smacks of desperation.”

As to Mr. Harland Flinstone, danger, Will Robinson:

“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.”

http://www.businessweek.com/bwdaily/dnflash/apr2002/nf20020425_0617.htm

Ruh-roh, Scooby-Doo…