SAN DIEGO, Calif./EWORLDWIRE/May 1, 2008 --- In an unprecedented move, the Fraud Discovery Institute (FDI) is sending out a letter to all PrePaid Legal Inc. (NYSE: PPD) participating law firms asking them to carefully re-examine and compare what consumers rely upon and are promised when they purchase "legal insurance" versus what they will actually end up receiving in terms of legal representation in their time of need. A copy of this letter can be found on the just-launched Fraud Discovery Institute Web site, 'http://www.prepaidillegal.com'.According to FDI Co-founder Barry Minkow, "At least in the case of product based multi-level marketing companies like Usana Health Sciences Inc (NASDAQ: USNA) and Herbalife (NYSE: HLF), consumers receive overpriced vitamins and weight-loss products, but in the case of PrePaid Legal Inc., endusers cannot even make that claim."
Says Minkow, "Through the fraud technique of, 'credibility by imputation,' legitimate law firms lend their good name to a service that is intrinsically worthless - as legal expert and former United States Attorney Brad Piggott clearly points out in our new YouTube video."
Piggott states that both associates and members think they are getting legal insurance for $25.00 per month and are protected if sued. In reality, he affirms, should they ever really need a lawyer in the network to defend them in a lawsuit, owners of the insurance receive approximately 300 hours of legal representation if the case goes to trial but only 2.5 hours of covered legal representation before the trial to perform duties such as the answering of the complaint, the handling of all the discovery motions, the performing of all the relevant depositions and the vigorous defense of their clients' best interest.
"No law firm in the world can honestly perform all these duties in the best interest of any client in 2.5 hours," said Barry Minkow. "Since the majority of lawsuits never go to trial, the insurance received is - for all intents and purposes - totally useless."
"Participating PPD law firms cannot be aware of this discrepancy and in good conscience lend their established name and reputation to a company that preys upon the needy and exploits them in their time of deepest need," said Minkow. "In our view, these law firms become unwitting accomplices to the PrePaid Legal Inc. scheme through the fraud technique of the 'imputation of credibility' to PrePaid Legal Inc. which results from use of each participating law firms' name."
PrePaid Legal Inc. has approximately one law firm in each state representing the needs of those who find themselves in a situation requiring legal representation. "Our hope is that when these participating law firms look below the surface of the PrePaid Legal Inc. scheme, they will realize that innocent people relied upon insurance that simply does not exist. Not only does PrePaid Legal face saturation from a failed, multi-level marketing business model, but the company also faces cancellations from consumers who realize they purchased a worthless service," said Minkow. "The problem is that this realization comes after they have been duped."
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