Common Fraud: Prepaid Legal Service Scams

A look at common prepaid legal service scams. Information on law support.

It sounds like a good idea; at least at first... after all, it can be useful to have a lawyer should you need one. From another point of view, being a seller of prepaid legal services can seem like a good way to make a little bit of extra income. Unfortunately, both types of association with prepaid legal services can result in more trouble than the service itself is worth.

First of all, let's look at what the service does. Prepaid legal service is much like insurance, allowing you to pay a premium for as long as you have the service, in case the service should be needed. Most prepaid legal services offer consultations and legal advice, as well as living will preparation and other common legal services. Unfortunately, many people may have the service for years without using it... at a cost of somewhere between $300 and $500 per year.

The worst part of the situation is that for many people, the legal matters that they do end up using the prepaid legal services for would actually cost them less if they paid for them outright. Many attorneys offer low-priced or even free consultations, and usually don't charge extraordinary prices for living will preparations. In addition, some of the more expensive legal matters, such as being arrested or going to court on criminal charges, aren't even covered by basic prepaid legal plans... they have to be purchased for an additional fee, if they're available at all.

On the other side of the equation are those individuals who decide that they want to make a bit of extra money selling prepaid legal plans as an affiliate for a prepaid legal company. There is usually an "investment fee" involved (around $250 is about the average), which means that you have to give them money in order to work for them. Many of the companies do offer training... however, you often have to pay for the training as well. (This can cost up to $500 or more, depending upon the company.)

After spending $750 to become an affiliate and get trained, the job often doesn't get much better. The market for prepaid legal services is often over-exaggerated to interest investors, who later find that there aren't that many people interested in purchasing what they have to sell. While it is possible to make money selling legal services such as these, the ones who lose money far outnumber those who gain. In the end, the only one who's sure to make money is the company itself.

A final consideration for affiliates is that in many cases, the product that they're selling simply isn't worth the amount that people are paying for it. Each sell is a potential disappointment, as well as a potential misrepresentation of the product that they're buying. Many affiliates can realize this later, and end up with a great feeling of guilt hanging over their head. In the end, prepaid legal services are most likely something to be avoided as both a buyer and a seller. Should you have legal questions, there are often multiple attorneys and legal aides who offer free consultations (and who often list this fact in advertising.) If you're looking for a way to make some extra money, there are many business opportunities that are much more legitimate than prepaid legal.

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