I just got off the phone with Pre-Paid Legal, one of those pyramid schemes that purports to provide legal services through signing up for a membership.  Naturally, one is then encouraged to sell others their membership, who sell others, creating supposed income in the process.

Not only did Pre-Paid Legal quickly refuse to do any of the supposed services for which we paid, but when we cancelled, in January of 2007, they continued to take money out of our bank account for the next 20 months, to the tune of $12.95 a month.  Since we have a few legitimate monthly bills paid this way, neither my husband nor I questioned the debit, which was masked with a "ppl-membership (800-....) identifier until just this week. 

My husband's curiosity led him to call the 800 number, only to hear a message indicating we were being billed by an organization we had cancelled membership in nearly 2 years before!  When he took it further, the customer service person tried to say that this was a different service: an identify theft protection service!  So, secretly, Pre-Paid Legal took our bank information, which they had gained under the false promises made and broken previously, and falsely charged our account, in effect, committing the crime that they were purporting to protect us from!

When we demanded our full 20 months of stolen moneys refunded, they "took it to management" and called the next day, graciously offering us $53 (instead of the $259.)  I refused, saying they stole our money, and needed to repay it in full.  Two days later, they called again, upping the offer to $128, claiming that "because we didn't protest the amount before, we had accepted it."  Again, I refused, this time informing them that unless they refunded the entire amount, I would take the matter public. Ms. Terrie Taylor, Customer Service Supervisor, told me that she was authorized only to offer me the $128, and that was Pre-Paid Legal's final decision.

Going to the internet, I found a long list of people who were are are still being defrauded by Pre-Paid Legal.  The company has a habit, it seems, of "forgetting" or "refusing" to allow cancellations, or simply to continue taking money out of people's accounts, for time periods of several years after the consumer has cancelled.

Interestingly, a new study was just released, which I think would make a great math lesson for all home schooling families.  You can find it at: www.pyramidschemealert.org. >

One part, in particular, showed how simple math can expose the lies of the multi-tiered distribution system which is the pillar of all multilevel marketing scams.  If each level has 4distributors, who each have four, who each have four, and so on, the first four levels will be permanently supported by all of those coming in at any lower levels.  What's more, the only way for the process to continue for 16 levels as is suggested is for 4 billion distributors to sign up. 

Another interesting use of math is the report's analysis of the real earnings for 11 of the most popular MLM schemes.  Of the 9 million people who sign up for one of these distributorships each year, 99 percent of those signers make less than ten dollars a week through their efforts, and one percent of the distributors receive 50 percent of the payouts.  Between 60 and 90 percent of distributors recognize the increasingly deep hole they are getting into, financially, and opt out within one year. To cover the lack of success of so many, the companies build a culture of blaming them for being weak, losers, inept, or failing to follow their surefire methods.  In one of the most famous MLMs, Amway (now renamed Quixtar) even the top level people can't sustain themselves financially, so they have a secondary "product" of training tapes, books and videos, which they then sell to the 99 percent of "losers" to keep them hooked into the pyramid.  Surprisingly, the odds of making money through joining an MLM are lower than through gambling in a casino! 

A thorough reading of the report is a sure innoculation for anyone who may be considering signing with an MLM.  But I feel it's important to teach the actual math of these schemes to our children, to give them the informational tools to be able to discern the scams when they see them.

There is a wealth of valuable math analysis and application in the report titled "The Truth about Multilevel Marketing" by Robert L. FitzPatrick.  Check it out!

And if you are even slightly tempted to help out some poor friend who's selling Pre-Paid Legal services by signing up, please check the experiences of others who've been robbed by their fraudulent practices: www.prepaidillegal.com.   Send it out to others too--forewarned is forearmed. 

Math is a powerful tool in exposing false and corrupt organizations.  Let's make sure our kids know the practical reality of these scams.

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