| Pre-Paid Legal Services wishes to clarify information provided in our press release issued yesterday. The company said, "We believe the proposed draft complaint from the Federal Trade Commission referred to in yesterday's release is the next step in an ongoing process between us and the FTC that began in March 2007. This process has been the subject of prior press releases and disclosures in previous public filings. The proposed draft complaint narrowly focuses on our Affirmative Defense Response System marketing program and specific representations regarding identity theft and data privacy issues. We believe the permanent injunctive relief proposed by the FTC pertains only to our ADRS marketing program. We began ADRS in 2006 as a complimentary program for businesses to learn more about identity theft and data security. The ADRS marketing program is a small part of our core business model, and is associated with a relatively small percentage of our revenues. Regarding the proposed disgorgement of proceeds, we received no fees for the ADRS presentation so we believe there are no fees or proceeds at issue that would be subject to disgorgement. Even if the FTC were to pursue disgorgement of membership fees pertaining to the underlying memberships written in group accounts solicited through the ADRS program, such fees represent less than 2% of all our total membership fees collected since January 1, 2006 and represent approximately 4.5% of our current membership fees in-force. We have responded to each request from the FTC and will continue to cooperate with the FTC to reach a mutually agreeable resolution." :theflyonthewall.com |
