Pre-Paid Legal Services, Inc

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IN THE MATTER OF PRE-PAID LEGAL SERVICES, INC.

CONSENT ORDER, ETC., INREGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket C-3729. Complaint, April 4, 1997--Decision, April 4, 1997 This consent order prohibits, among other things, an Oklahoma-based corporation from making certain false and misleading claims concerning the benefits and appropriateness of living trusts or any legal instrument or service it offers and requires the respondent to clearly and conspicuously disclose to consumers that such trusts may be legally seilensed on similar grounds as wills, that living trusts may not be appropriate in all instances, and that the transfer of an individual's assets into a living trust is not included in the eae of creating the trust. In addition, the respondent must offer a $165 refund to every purchaser of an American Association for Senior Citizens trust who hasn't already received a refund and who doesn't live in certain states that have already been offered partial refunds in connection with an earlier multi-state settlement. Apperances For the Commission: Elizabeth M. Palmquist. For the respondent: Margaret Feinstein, Dickstein, Shapiro, Morin & Oshinsky, Washington, D.C.

COMPLAINT The Federal Trade Commission, having reason to believe that The Administrative Company, a corporation, Michael P. McIntyre, individually and as an officer and director of The Administrative Company, and Pre-Paid Legal Services, Inc. ("Pre-Paid"), a corporation (collectively, respondents), have violated the provisions of Section 5 of the Federai Trade Commission Act, as amended, 15 U.S.C. 45, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, alleges: PARAGRAPH 1. Respondent Michael P. MclIntyre's current address is 4328 Hollow Oak, Dallas, Texas. Respondent The Administrative Company has ceased doing business. Its address is the same as that of Michael P. McIntyre. Respondent Pre-Paid Legal Services, Inc., is an Oklahoma corporation, with its principal office or place of business at 321 E. Main Street, Ada, Oklahoma.

ae eed PRE-PAID LEGAL SERVICES, INC. 983 982 Complaint PAR. 2. Respondents, at all times relevant to this complaint, have advertised, promoted, offered for sale, and sold living trusts to consumers. A living trust is a trust into which an individual can place all of his or her assets during his or her lifetime and, by transferring ownership of the assets to the name of the trust, thereby remove the assets from the individual's estate.

PAR. 3. The acts and practices of respondents alleged in this complaint have been in or affecting commerce, as commerce is defined in Section 4 of the Federal Trade Commission Act. PAR. 4. In the course of marketing their products to the public, respondents, directly or through commissioned sales agents, have caused to be disseminated sales literature concerning living trusts, including, but not necessarily limited to, the attached Exhibits 1 and 2. This literature contains the following statements: (a) It is your legal right as a UNITED STATES Tax Payer to establish a Living Trust. By establishing a Living Trust, at your death your estate avoids PROBATING YOUR WILL which can COST SEVERAL THOUSANDS of dollars in legal and executor fees and TAKE SEVERAL YEARS before being transferred to your family and loved ones. YOU RETAIN FULL CONTROL OF ALL ASSETS! YOU COULD SAVE THOUSANDS OF HARD EARNED DOLLARS! Exh. 1.

(b) A LIVING TRUST eliminates ALL PROBATE FEES and COST... . With a LIVING TRUST, your family will not have to go through probate, and can avoid paying expensive probate fees and costs. Exh. 2, p. 18. (c) A LIVING TRUST allows a quick DISTRIBUTION to your heirs. Assets in probate court are often frozen two years or more, even with a WILL. A LIVING TRUST allows these same assets to be distributed within days to your loved ones, since a LIVING TRUST avoids Probate Court. Exh. 2, p. 17. (d) Total assets [pass through a] living trust [to] spouse or heirs [in] 1-3 days. Exh. 2, p. 24.

(ec) A LIVING TRUST prevents a WILL CONTEST. . . . Through a LIVING TRUST your wishes will be carried out without interference. Exh. 2, p. 17. (f) Membership entitles you to:

1. FREE LEGAL SERVICES FOR PREPARATION OF A REVOCABLE LIVING TRUST BY A QUALIFIED ATTORNEY IN YOUR STATE AND A FREE POUR-OVER WILL. Exh. 2, p. 8.

(g) AN A-B LIVING TRUST protects against catastrophic MEDICAL COSTS... . With an A-B LIVING TRUST, if you become seriously ill, your trustee can make gifts of your property to your heirs, and three years thereafter, can seek government benefits for your care, so that the bulk of your estate will go to your heirs. Exh. 2, p. 19.

Complaint 123 F.T.C.

(h) Is There Anything Bad About a Living Trust? No. There is nothing bad about a Living Trust. Exh. 2, p. 20.

PAR. 5. Through the use of the statements contained tn the sales literature referred to in paragraph four, including, but not necessarily limited to, the sales literature attached as Exhibits 1 and 2, respondents have represented, directly or by implication, that: (a) The use of a living trust avoids all probate and administrative costs.

(b) At death, a living trust allows assets to be distributed immediately or almost immediately.

(c) A living trust cannot be challenged.

(d) Living trusts are prepared by local attorneys. (ec) A living trust protects against catastrophic medical costs. (f) A living trust is the appropriate estate planning device for every consumer.

(g) There are no disadvantages to a living trust. PAR. 6. In truth and in fact:

(a) A living trust does not always avoid probate and administrative costs.

(b) The use of a living trust does not necessarily result in immediate distribution of assets since creditors may file claims against the trust instrument.

(c) A living trust is not immune from challenge. (d) Most living trusts prepared for AASC members were not prepared by local attorneys. Instead, of the 3,064 living trusts prepared for AASC members in 43 states, approximately 3,000 were prepared by an Arizona attorney licensed to practice law solely in Arizona and New York.

(e) A living trust does not protect against catastrophic medical costs.

(f) A living trust is not appropriate for everyone. The determination of whether a living trust is appropriate for a particular consumer requires an examination of the assets that compose the consumer's estate, the potential tax consequences of the estate plan, and the objectives of the consumer.

(g) There are disadvantages to a living trust. For example, while probate law imposes a statutory deadline beyond which creditors can PRE-PAID LEGAL SERVICES, INC. 985 982 Complaint no longer file claims against a will, in some states, there is no law limiting the time that creditors may file claims against a trust instrument.

Therefore, the representations set forth in paragraph five were, and are, false and misleading.

PAR. 7. Through the use of the statements contained in the sales literature referred to in paragraph four, including, but not necessarily limited to, the sales literature attached as Exhibits 1 and 2, respondents have represented, directly. or by implication, that at the time they made the representations set forth in paragraph five, respondents possessed and relied upon a reasonable basis that substantiated such representations.

PAR. 8. In truth and in fact, at the time they made the representations set forth in paragraph five, respondents did not possess and rely upon a reasonable basis that substantiated such representations. Therefore, the representation set forth in paragraph seven was, and is, false and misleading.

PAR. 9. In their advertising, promoting, offering for sale, and sale of living trusts, respondents have failed to disclose that the transfer of an individual's assets into the living trust was not included in the price paid for creating the living trust and that it would be the responsibility of the individual purchaser to transfer assets into the trust, once created, or to arrange for another individual or entity to do so. This fact would be material to consumers in deciding whether to purchase a living trust and from whom to purchase a living trust. The failure to disclose this fact was, and is, a deceptive act or practice. PAR. 10. The acts and practices of respondents as alleged in this complaint constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

Complaint 123:F.T.C.

EXHIBIT 1 AASC. ip 1155 15th Street NW. Suite 810 we ;

veeneny DC 20077-1637 .

ud 4 ak ae - ft OPEN — IMMEDIATELY! ito AAR AKCAR-AT~SORT## CR-O2 A37A 081 4812 $264 1549 541 VENTURA AVE SAN FATEO CA 94403-3223 SPECIAL BULLETIN:

It is your legal right as a UNITED STATES Tax Payer to establish 4 Living Trust. By establishing a Living Trust, at your ceath your estate avoids PROBATING YOUR WILL which can COST SEVERAL THOUSANDS of dollars in legal and executor fees and TAKE SEVERAL YEARS tefore being transferred to your femily anc loved ones. YOU RETAIN FULL CONTROL OF ALL ASSETS! YOU COULD SAVE THOUSANDS OF HARD EARNED DOLLARS! INFORMATION IS AVAILABLE ON HOW TO OBTAIN A FREE LIVING TRUST Just fill cut and return this pcstece paid card. Narre Agas “> Maie__ , Farmate :

Saunt ae5 1 23 3 1 3 1576 2277 45 47 28.739098 yee5 1 23 3 1 4 1635 2293 47 13 30.317833 eae5 1 23 3 1 5 1691 2289 270 20 4.535736 eCAR-RT-SORT#®5 1 23 3 1 6 1988 2287 92 22 75.622917 CR-O24 1 23 3 2 0 1527 2319 451 31 -1 5 1 23 3 2 1 1527 2319 72 25 29.668709 AS7A5 1 23 3 2 2 1627 2322 52 28 92.940659 0815 1 23 3 2 3 1710 2320 72 22 92.919464 48125 1 23 3 2 4 1809 2320 70 20 60.240723 S2645 1 23 3 2 5 1906 2320 72 20 94.235901 15493 1 23 4 0 0 943 2364 986 23 -1 4 1 23 4 1 0 943 2364 986 23 -1 5 1 23 4 1 1 943 2367 56 16 34.614059 Fora5 1 23 4 1 2 1009 2367 59 15 3.388947 =cra - Beate eee 541 NENTURA AVE bal t Fair ts HE ‘. ee SAN MATEO CA 94402-3223 Se, PRE-PAID LEGAL SERVICES, INC. 987 Complaint EXHIBIT 2 Wij, Wud ad a ee Kae KKK aK KKK KKK KKK KK Re = ee ee ee eee NATIONWIDE NON-PROFIT ORGANIZATION 1155 15th Street, N.VW/, Suite 810 Weshineton, 0.C. eSCCS 4-800-880-1310 FEDERAL. TRADE COMMISSION DECISIONS Complaint 123 F.T.C.

EXHIBIT 2 i fers =H fy ‘ ¥ 7 rs ul benefits and services provided » ASSOCIATION FOR SENIOR Dear Member: RES “ae es We welcome you to the wodderful world of meaningt as part of your membership in THE AMERIC# CITIZENS.

As the senior officer of this non-profit Association, and one who is on the sunny side of sixty, | assure you | value my membership and enjoy the many benefits available to all of our members. , This Association was founded several years ago and entrusted with the responsibility of getting the message to people our age so that we can receive every benefit and advantage to make sure the dollars we have spent a lifetime earning and saving will pass on to our heirs as intact ‘as:Uncle Sam.will allow. With this responsibility as our driving force, our Association explored every conceivable avenue available before makirig the decision to educate our membership on the value and importance of REVOCABLE LIVING TRUSTS. . we fs It is also important for you to know and ‘understand what this Association is committed to in regard to a PRE-PAID LEGAL benefit that actually pays the legal fees for your REVOCABLE LIVING TRUST, and provides many other legal benefits. Look at the following pages to understand our commitment to you in this respect. In addition, we have sought meaningful and worthwhile consumer benefits and services for our membership. We are sure you can recognize the value of these benefits for you and your family. We are happy you have joined our “YOUNG AT HEART” adult Association. A living trust is the most important gift you can give to your loved ones.

Also, a portion of American Association of Senior Citizens membership dues are used to support the research efforts of medical research facilities, and others, as they seek better ‘treatment and cures relating to our senior citizens. AASC Medical Research Foundation’s charter, as explained in the following section, is to continually stay abreast of current research efforts throughout the United States to determine who should receive financial support fram the Foundation. Please know we are here to make things a little better for you and all of our growing family of members. As soon as we receive your applicetion | will see that your membership kit is forwarded to you.

Warmest personal regards, Conaid T. Bestinn Executive Directcr S°SS* Secca> 45iliaic- PRE-PAID LEGAL SERVICES, INC. 989 Complaint EXHIBIT 2 MEDICAL RESEARCH FOUNDATION Complaint 123 F.T.C.

EXHIBIT 2 As Directors on the Board of AASC Medical Research Foundation, we are charged with guiding the Foundation to fulfill its charter of supporting worthy medical research that relates to better health care for our senior citizens. In many cases, this money has a direct impact on community awareness, education and health care delivery. About our President...

Donovan F. Ward, M.D.

AASC Medical Research Foundation President. Past President of the American Medical Association.

A Fellow of the American College of Surgeons. President of the Fifty Year Club of American Medicine. Member of the AMA's committees on Medical Practice and Public Relations.

Past President and National Director, American Health Care Advisory Foundation.

©*S5* Areccan Asscc.aten ‘er Sever Cuzers PRE-PAID LEGAL SERVICES, INC.

Complaint EXHIBIT 2 Our other Directors are...

Denis J. Fu, M.D, a practicing physician in Hawaii, has served as a medical consultant for various-state and national development programs.

Alexander L. Sadowski, D.D.S., has accumulated aver 1000 hours of continuing education, served on the New Mexico State Dental Association's Finance Committee and is both past president and secretary of the Southwest Distnct Centel Society.

Robert P. Ewing, is pas:

Chairman and President of Bankers Life and Casualty Company and is a Trustee of the MacArthur Foundation, a Director of Evanston Illinois Hospital and a former Director of the Health Insurance Association of America.

ef ~ Jase has a long and distinguished career in Public Health and is currently the Health Officer far Lee County, Florida, a positicn he has held since 1960.

Donald T. Berlinn, has been Vice President of ITT Life Insurance Company Agency and President of Medical Air Services Association, the nation’s first nationwide air ambulance service. Currently President of Affordable Dental Connection and Assoc:atian Management Group and Fresident of Amercan Assce:ation for Sesior C.r.zens, ph Lawrence, M.D., Howard E, Cartwright, of Chicaga is past CEO of College of American Pathologists, past Director of College of American Pathologists Foundation and a member of American Association of Medical Saciety Executives. * has a long fist of accomplishments including:

past President of the California Medical Association.

All of our listed Directors are also members of the Advisory Board of American Association of Senior Citizens and advise the Association on developing new benefits or improving existing benefits far our senior citizens.

Complaint 123 F.T.C.

EXHIBIT 2 Financial support is provided by the AASC Medical Research Foundation to the following and other research facilities: ® American Medical Association American Heart Association American Public Health Foundation Alzheimers Disease and Related Disorders Association California Medical Education and Research Foundation Mt Sinai Foundation National Kidney Foundation Leukemia Research-Foundation National Multiple Sclerosis Society Regional Cancer Treatment Center — lowa University of lowa Dept. of Immunology University of San Francisco Cardiovascular Research In addition, the Foundation has given grants to the following, and others: ON LOK Senior Health Services lowa Methodist Health Foundation March of Dimes — Walk America University of lowa College of Medicine San Antonio Area Lupus Foundation Tulane University Medical Center, Dept. of Pediatric-Cardiology Cancer Counseling, Inc.

Tarrant County Cancer Care Services Cystic Fibrosis Foundation Univ. of Connecticut Health Center Jean Marie Colbert Bone Marrow Transplant Center Children’s Heart Foundation Fred Hutchinson Cancer Research Center Cancer Research Foundation of North Texas Allegheny-Singer Research Institute University of Florida — Oncology St. Jude's Children’s Hospital Sloan-Kettering Cancer Center North California Transplant Bank ALS & Neuromuscular Research Foundation Children’s Hospital Medical Genter Florida Geriatric Research Foundation Regional Cancer Foundation Children's Memorial Foundation Cancer Care Services The AASC Medical Research Foundation was formeny known as the Amencan Health Care Advisory Association Foundation, providing financial support to the above and other research facilities. wn e-C23, Amercan Assoc:aten fer Serior Sitzecs PRE-PAID LEGAL SERVICES, INC.

982 Complaint EXHIBIT 2 AASC Provides for its Members the Benefits of Pre-Paid Legal Services, Inc.® A few of the most common personal! worries and business activires ne eding an attomey’s professional counsel and assistance include:

Threat cf a Lawsut Adopuon Consumer Fraud Oebt Cotecuon Domestic Probierres Tares Auto Transaction Parwrersheps Formmng a Corporauon Contractor Dispute Lease Crangs Property Purchase Trusts Motor Vetucte Reets Manufacturer Propierns Evctsn Creditor Harrassment Crvrunai Threats Bankruptcy Sai An American Stock f= Exchange Company Paid Over 80,000 Attorneys Paid Over $80,000,000 in Legal Fees Over 5,000,000 Members Have Access to Services Nationwide Complaint 123 F.T.C.

EXHIBIT 2 embership entitles you to:

LIVING TRUST BY A QUALIFIED ATTORNEY IN YOUR STATE l FREE LEGAL SERVICES FOR PREPARATION OF A REVOCABLE AND A FREE “POUR-OVER” WILL (see following section) LEGAL SERVICES AT DEATH IN-OFFICE ATTORNEY CONSULTATION UNLIMITED TELEPHONE CONSULTATIONS WITH A PROVIDER ATTORNEY TRIAL DEFENSE FUND IRS AUDIT PROTECTION LEGAL ASSISTANCE IN MANY CASES a F] MOTOR vevicLE LEGAL SERVICE e°SE1 Ameccan Asscoaten ‘er Sener TES PRE-PAID LEGAL SERVICES, INC. 995 982 Complaint EXHIBIT 2 nlimited Telephone Consultations:

® As a member of AASC, you may call the Pre-Paid Legal Toll-Free Number, 1-800- 654-7757 from 8:30 a.m.-5:00 p.m. any business day. Pre-Paid Legal will direct you to your provider attorney for legal advice. ® You do not need to guess about your legal rights or spend hundreds of dollars for consultations with an attorney. In the privacy of your own home, you simply call the attorney and he will answer questions concerning ANY personal or legal matters. The following are just a few examples of the types of questions you may need answered:

4. “lam 67 years old and collecting social security. Is it legal for me to claim a deduction for a dependent who earns an income?"

2. “My company is trying to force me into retirement by offering me an early retirement buyout. What are my rights?"

3. “It has been 12 weeks since | was in the hospital and my insurance company has still not paid the $1,500 hospital bill. How long do they have to settle the claim?” 4. “My neighbor's teenage son, despite my requests to stop, continues to play land music that keeps me awake at night. Is there anything | can do?" 5. “| had a contractor fix my roof, it still leaks and the contractor will not return my call. What can | do?”

6. “My husband is in a nursing home. | do not: feel he is getting the proper care. Aren't there certain standards set by the state that nursing homes must follow? What are my husband's options?”

7. “I inherited some land in another state and | would like to lease it out. How do | do this?"

In addition to advising you of your rights, the attorney, if necessary, will personally call or send a letter to help resolve your problem. B°GS5 Seccar 4330¢ a0 27 ‘> Tenor Tosecs Complaint 123 F.T.C.

EXHIBIT 2 p to SO Hours Legal Assistance at Death:

Everyone needs a lawyer upon the death of a family member for settlement of the estate and consultation with the surviving spouse or children: : ® To finalize trust dacuments © Toresolve liens contesting the trust, including the IRS ® For out-of-state property settlements and property sales: ® For deed transfers ® Toresolve claims of creditors, including hospitals, funeral homes, etc. ® For protection against any person who attempts to challenge the estate The settlement of an estate is a complicated and lengthy process. Gualified attarneys usually charge between $175—S300 per hour for their services. This translates into a cost of approximately $8,750 — $15,000 for 50 hours of legal assistance to settle an estate. As a member of AASC, your membership entitles you to up to 50 hours of legal assistance, depending on your member classification. A True Story:

A Senior Citizen of Dixon, Illinois joined AASC in June of 1997. In July, 1991, he passed away. His children, rather than beginning the long and costly process of finding an attorney to probate his estate, simply called the AASC members’ toll-free number. A Pre-Paid Legal attorney immediately began to settle the estate. “My father only became a member six weeks ago but we feel so fortunate that he did. We immediately called a provider attorney and were so relieved to learn that we would have the legal work on my father's estate done immediately thanks to Pre-Paid Legal. The service is invaluable," said the daughter. 7S, Ameresn Assce:aucn for Semier 5227S PRE-PAID LEGAL SERVICES, INC. 997 982 Complaint EXHIBIT 2 n-Office Consultation:

ONE PER YEAR AASC provides its members with a Living Trust. Each year it should be reviewed and updated with changes concerning: e Any Legal Matter e Investments e Deeds e Property and Real Estate e Cars, Trucks and Equipment e Bank Accounts C.D.’s Complaint 123 F.T.C.

EXHIBIT 2 motor Vehicle Legal Service Expense Benefits:

Nearly every American drives some form of motor vehicle every day. You are at. risk, every time you get behind the wheel of your car.’ AASC is proud to offer you a wide variety of coverage in the area of motor vehicles. Read below to discover the valuable benefits you will have after enrollment. MINOR LEGAL EXPENSES: If a licensed member, spouse, or any covered dependent, while driving any licensed motor vehicle, is accused of an alleged traffic violation, the Company pays your attorney fees, pursuant to the following schedule; Up to $75 for legal assistance regarding such charge; up to S125 for legal assistance requiring court appearance; up ta S200 for legal assistance which includes trial work. MAJOR LEGAL EXPENSES: If a licensed member, spouse or any covered dependent, while driving any licensed motor vehicle, is accused of a criminal charge such as manslaughter, involuntary manslaughter, negligent homicide or vehicular homicide, the Company wil! pay your attorney fees based on a maximum hourly rate of $100. SUSPENDED DRIVER'S LICENSE: The Company provides for professional assistance, and if necessary, maintenance of your driver's license. The Company will Pay a reasonable attorney fee for the suspended driver's license services up to S250 per occurrence to your attorney.

LEGAL COLLECTION SERVICE: Should your licensed auto, private boat or motorcycle be damaged in an accident, the Company will assist you in collecting damages done to your vehicle. The Company provides legal assistance, win, lose, or draw, in collecting damages when your auto, private boat or motorcycle is involved in an accident, and will pay up ta S250 per occurrence to your attorney. PERSONAL INJURY LEGAL EXPENSES: The Company will pay your attorney fees. win, lose, ar draw, up to S250 per occurrence to collect or file for personal injuries of $1000 or less received while driving, riding, or when struck as a pedestrian by any motor vehicle.

Sts" Arecan Ssec2 acen for Sensor Ss!ess ni PRE-PAID LEGAL SERVICES, INC. 999 Complaint EXHIBIT 2 S| 5,000 Trial Defense Fund:

All too often you read in the paper about someone being sued over what you would consider a trivial matter. . . It couldn't happen to you. But everday, people just like you are sued by neighbars, friends, co-workers, even family, In this sue happy society, it is great to know that your AASC membership offers benefits to cover just that. The Company will pay up to a maximum of $5,000 in attorney fees the first membership year for either the member or member's spouse, if he or she is named Defendant or Respondent in a covered civil or criminal action in a court of law, The criminal action must be one which arises out of the direct performance of the Covered Person's employment activities. The trial defense fund benefit will even pay for the attorney even though your insurance company may have retained one for you, if the choice of attorney is mot yours and you feel you need your own personal attorney.

BENEFITS TO BE PAID AS FOLLOWS:

Benefits are based on a maximum hourly rate of $100 end are to be paid as follows: Up to S250 for any and all legal services rendered in defense of the covered lawsuit prior to the actual trial.

Up to S300 per day for each actual day of trial, including covered criminal preliminary hearings not ta exceed an annual aggregate trial defense fund of S5,Q00 per membership. Upon renewal of the membership the Covered Person will receive additional trial defense benefits at no additional cost to the member, The trial defense fund increases, as follows: The trial defense fund will be increased to an annual aggregate sum of $10,000 vend ,per membership payable up to $300 for any and all legal services rendered prior newa' to trial and up to S350 per day for each actual day of trial, including criminal preliminary hearings.

3rd The trial defense fund will be increased to an annual aggregate sum of $15,000 Year Renewal P&" membership payable up to $350 for any and all legal services rendered prior to trial and up to S400 per day for each actual day of trial, including criminal preliminary hearings.

4th The trial defense fund will be increased to an annual aggregate sum of $20,000 Year Renewal PE” membership payable up to S400 for any and all legal services rendered prior to trial and up to S450 per day for esch actual day of trial, including criminal preliminary hearings.

5th The tris! defense fund will be increased to an annual aggregate sum of $25,000 Year Renewal oo Membership payable up to S450 for any énd all legal services rendered prior ew" to trial and up to SSOO per day for esch accual day of trial, including criminal preliminary heerings.

TSE" 4reresn Asscc aren ter Serer Cores Complaint 123 F.T.C.

EXHIBIT 2 [] RS Audit Protection Service:

L.AS.... The idea of an audit strikes fear in even the most careful tax payer. Why not enjoy the peace of mind that the AASC membership offers through the IAS Audit Protection Service? Here are the details.

The Company will pay up to a maximum of $5,000 in professional fees for either the member, spouse, or dependent children, to the member's choice of any licensed public accountant, certified public accountant, enrolled agent or attorney or any combination thereof when a member is_notified in writing by the Internal Revenue Service (IAS) of an audit of such member's tax return or such member is requested in writing to appear at the offices of the IRS concerning such member's tax return. BENEFITS TO BE PAID AS FOLLOWS:

Up to $100 for consultation, advice and/or assistance, upon receipt of written notice from the IAS that the member's tax return is being audited’or such member is requested in writing to appear at the offices of the IRS concerning such ‘member's tax return In the event settlement is not achieved with the IRS within che (30) days, then up to S250 beginning onthe thirty-first (31) day to provide the member, spouse, or dependent children representation at the audit and at the audit and for negotiations, conferences, telephone conversations, settlement conferences, subsequent thereto, but.prior to the institution of litigation. In the event settlement is not achieved without litigation, then payment will be made up to the balance of $5,000 in professional fees in either event of the IAS suing the member or the member paying the disputed tax and then suing the IAS. Such payment to be made at up to a rate of S300 per day of each day of trial appearance. Coverage begins with the return due on April 15 of the year this contract is effective.

* Amencsn Ssscciaten for Secssce Ccrsss * wn i PRE-PAID LEGAL SERVICES, INC.” 1001 982 Complaint EXHIBIT 2 ‘legal Assistance in Many Cases:

AASC membership provides. legal’: *:

assistance in many cases including a “the following... ee Se Ree PHONE CALLS AND LETTERS ON YOUR BEHALF A letter or phone call from your Plan Attorney can get you the results you want fast and cut through the red tape. You and your Plan Attorney can now decide together when this is the best legal step for you. There is no charge forthe first lettér. (any further . fees are to be set .by the Plan Attorney and are the sole ceqpenene of the Named Member on.the Contract.) : REVIEW OF CONTRACTS AND DOCUMENTS You can have an unlimited number of legal documents of up ta three pages each reviewed ‘ by your Plan Attorney, free of charge. Your Plan Attorney. will,.give you an analysis of the documents-and suggest Gans for your benefit or any other necessary, procedures, before you sign! | | | LEGAL FORMS BENEFIT Imagine having access to..the most often needed legal.documents — just a phone call ‘away! The ‘documents you need will be prepared for you at a greatly. reduced rate, but don't worry, still with the same care and concern for your welfare. A list of legal forms available, along. with the nominal charges, will-be in your contract packet. Complete information ; about the forms you need can be obtained with just a phone call to your Plan Attorney. “Sat _Awetiat aF8sTGTt* 747 Sawer Ss S288 Complaint 123 F.T.C.

EXHIBIT 2 in > ALL ABOUT A LIVING TRUST PRE-PAID LEGAL SERVICES, INC. 1003 Complaint EXHIBIT 2 fy dvantages of a Living Trust | PROBATE:

A LIVING TRUST avoids a complex PROBATE proceeding. Probate is the court process designed to transfer title of assets to your heirs. A Probate is required even when there is a WILL, The Probate Court procedure is complicated by laws requiring your Executor to obtain special court approval to take any actions, including paying your bills, and distributing your assets. With a LIVING TRUST, the title to property is transferred through the trust, so that your heirs can easily receive these assets, and will not have to go through complex Probate Court proceedings.

DISTRIBUTION:

A LIVING TRUST allows a quick DISTRIBUTION to your heirs. Assets in probate court are often frozen two years or more, even with a WILL. A LIVING TRUST allows these same assets to be distributed within days to your loved ones, since a LIVING TRUST avoids Probate Court. PRIVACY:

A LIVING TRUST is completely PRIVATE. There is no privacy with a public Probate Court Proceeding. - A LIVING TRUST is a private document, the size and distribution of your estate remains confidential.

WILL CONTEST:

A LIVING TRUST prevents a WILL CONTEST. In Probate Court, anyone can easily contest a WILL, even without a lawyer.

Through a LIVING TRUST your wishes will be carried out without interference. CONTROL:

A LIVING TRUST enables you to CONTROL your assets. By making a gift of all of your property ta your heirs, you may eliminate probate. However, once the gift is made you have fost ownership of your property, which you may later need for your support.

A LIVING TRUST ellows you to retain control of your property, and upon your demise, YOU CONTROL WHEN AND HOW MUCH YOUR SENEFICIARY WILL RECEIVE. * SPECI Hsscs2sc cir Saver ores Complaint EXHIBIT 2 DISABLED HEIRS:

A LIVING TRUST preserves benefits for DISABLED HEIRS. A disabled their Senerally loses government assistance payments upon receiving an inheritance. A LIVING TRUST can authorize your successor trustee to make special distributions for a disabled their while still preserving government: benefits. PROBATE FEES:

A LIVING TRUST eliminates ALL PROBATE FEES and COST. Probate fees are based on the entire value of an estate, without deducting bills or mortgage. : The probate expense can be as much as the following, or more: ‘ APPROXIMATE EXPENSES GROSS ESTATE SIZE $100,000. : $10,000.

$300,000. $30,000.

$500,000. $50,000.

This example also applies to all other mortgaged property owned in every state. If a couple owns property in four states there would be four probates required. With a LIVING TRUST, your family will not have to go through probate, and can avoid Paying expensive probate fees and costs.

JOINT TENANCY:

A LIVING TRUST avoids JOINT TENANCY problems. Joint tenancy isa -fnethod of avoiding probate, where, upon death of one co-owner, the survivor becomes the full owner of the property.

4. As an owner, your child has the power to interfere with your decision to sell or refinance the property.

2. If your child should go through divorce, the other spouse may claim an interest in the property.

3. If your child should owe taxes, the tax collector may take your property to satisfy the tax obligation.

4. If your child should be found liable in any lawsuit, your property may be sold to pay the judgment.

With a LIVING TRUST, probate is entirely avoided and there is not exposure of your assets to the debts or liabilities of your child. CONSERVATOR:

A LIVING TRUST avoids a CONSERVATOR. If you ever become incapacitated, the Probate Court will appoint a conservator to manage your property, and your estate will be required to pay court fees and costs for the conservatorship each year. With a LIVING TRUSJ, your trustee can manage your property if-you are unable to handle your affairs, and there are no court fees and costs. 03591, Amencan Asscciaton for Sener S.tens 123 F.T:C.

PRE-PAID LEGAL SERVICES, INC. 1005 982 Complaint EXHIBIT 2 l INCOME TAXES:

A LIVING TRUST saves sizeable INCOME TAXES. When a couple holds property or stocks in joint tenancy, the surviving Spouse is required to pay a capital gains tax upon sale. This tax is based upon one-half of the increase in value of the property since the time of its purchase, In a LIVING TRUST, title is transferred into the trust. This entirely eliminates the Federal Capital Gains Tax on all increases in value up to the date of death. ll ESTATE TAXES:

An A-B LIVING TRUST saves substantial ESTATE TAXES. Estate taxes are paid to the federal government for the transfer of praperty upon death. Federal estate taxes are based on the size of the estate and are imposed where the net value of an estate is larger than $600,000.00. The Federal Estate Taxes are almost onehalf of the estate after deducting $600,000.00. A Living Trust saves substantial estate taxes as follows: APPROXIMATE TAX SAVINGS NET ESTATE S 800,000. $ 75,000.

$1,000,000. $153,000.

$1,200,000. $235,000.

12 MEDICAL COSTS:

AN A-B LIVING TRUST protects against catastrophic MEDICAL COSTS. If you should ever require care in a convalescent hospital or long term nursing home, the medical expense could eventually wipe out your estate, thereby denying you the opportunity to leave your property to your loved ones. With an A-B LIVING TRUST, if you become seriously ill, your trustee can make gifts of your property to your heirs, and three years thereafter, can seek government benefits for your care, so that the bulk of your estate will go to your heirs. ia ©°SS% Areccan Assce:at.cm ‘o> Sa- te Lizecs Complaint 123 F.T.C.

EXHIBIT 2 questions Most Commonly Asked Q: Is There Anything Bad About a Living Trust? 4A: No. There is nothing bad about a Living Trust. It is a traditional and well-proven estate planning tool that has been used, in one form or another, for hundreds of years.

Any problems people have with a properly prepared Living Trust have nothing to do with the trust itself, but with the property left out of it because they failed to change titles and beneficiary designations to the name of their trust. The trust still works - but any property left out risks being probated. If you desire to completely avoid probate, all assets must be in your Living Trust. It does not take much time to change the titles and beneficiary designations, and once it is done your Living Trust is easy to maintain.

Where Should | Keep My Living Trust Documents? We suggest that you make several copies of your original documents and give a copy to each of your back-up trustees. Make sure you tell them where the original documents are located. We suggest you keep the original trust document in your safe deposit bax or another safe place and keep one copy at home so you can review it from time to time. (Make sure your safety deposit box is titled in the name of your trust, so your back-up trustee will have no trouble gaining access.) pO Can | Put Out-Of-State Property Into The Trust? : Yes, you can, and in fact, you should. If you do not transfer out-of-state property into your trust, your heirs will need to have a separate probate in each state in which you own real estate. This may result in probate fees for each state. If, however, the property is transferred into your trust, the probate systems of all of the states ‘involved are avoided.

po e Q: What If | Move To Another State? A : Call Pre-Paid Legal at 1-800-654-7757 to locate a Pre-Paid attorney nearest you. Ask for a review. Most states follow the same general rules, so if something needs changing, only those parts are changed that need to be under the laws of that state. You do not need a completely new document. What If | Buy Property In Another State? Before yau buy property in another state, especially real estate, check to make sure it can be titled in the same way as in your home state. A bank or title insurance company in the state where the property is located can tell you if the title you Went to use is acceptable in that state.

BO =°GS1 Amencan Asscoc:aton ter Senor C.czers w PRE-PAID LEGAL SERVICES, INC. 1007 982 Complaint EXHIBIT 2 Q: Does Transferring Property Into a Trust Cause a Reappraisal Of The Property So That Property Taxes Are Raised? A: No, it does not. Revenue and Taxation Code 62 specifically states that a transfer into a Revocable Living Trust does not cause a reappraisal of the property. QO: How Should Property And Accounts Be Titled? A: As a general rule, all of your property should be titled in the name of your trust. Here are some examples:

If you are single:

“(your name), Trustee under trust dated (insert date yau signed your trust).” If you are married: ' (yours 1 13 1 2 2 812 1117 87 19 95.143837 names 1 13 1 2 3 918 1111 56 26 96.158958 ands 1 13 1 2 4 992 1117 70 25 96.761284 yours 1 13 1 2 5 1081 1110 136 32 42.054535 spouse's5 1 13 1 2 6 1236 1109 104 29 96.584290 name),5 1 13 1 2 7 1358 1108 138 26 96.444901 Trustees5 1 13 1 2 8 1515 1107 88 26 96.056465 under5 1 13 1 2 9 1620 1110 81 22 96.056465 trusts 1 13 1 2 10 1719 1105 87 26 92.371895 dated5 1 13 1 2 11 1824 1105 103 25 82.274612 linsert5 1 13 1 2 12 1945 1104 71 25 96.445168 date2 1 14 0 0 0 663 1146 1351 119 -1 3 1 14 1 0 0 663 1146 1351 119 -1 4 1 14 1 1 0 712 1146 373 32 -1 5 1 14 1 1 1 712 1153 52 25 95.993065 you5 1 14 1 1 2 777 1146 101 32 96.254395 signed5 1 14 1 1 3 890 1153 70 25 93.288773 yours 1 14 1 1 4 972 1146 113 26 45.781120 trust). Very often you will see the letters “UTD" used as a shortened version of the words “under trust dated.”

If | Qwn Partial Interest In Property With Others, Can | Transfer That Q:

Interest Into A Trust? A: Yes. You can transfer your share of any property into the trust without affecting the shares of the others. :

QO: If | Want To Sell Assets Or Add New Assets To The Trust, Will | Meed To Return To The Attorney's Office Each Time? A: No, you will not. You can sell assets and add new assets yourself without requiring a change of the trust.

Can | Sell Assets | Have In The Trust Without Any Complications? Yes, you can. You can freely sell your property even if it is in the name of the trust. The only difference will be that escrow company officials may ask for a copy of the trust documents.

po Can IRAs, KEOGHS And Other Tax Deferred Investments Be Transferred Into The Trust? IRAs, KEOGHS and other tax deferred investments cannot be transferred into the trust. However, the trust can be the beneficiary of those investments. Each case must be discussed with an attorney to determine whether it is better to name the trust as beneficiary, or the individuals themselves as beneficiaries. a) SEE" Armeccar Assccatce er Seco lt cere Complaint 123 F.T.C.

EXHIBIT 2 Q:

A:

What About Adding Other Persons On My Accounts,.Deeds, Etc.? Never add another person on the title of your property or your accounts (this includes parents and children) without first checking with your attorney. It could cause you or your family some very serious problems, possibly even defeating the purposes of your trust or exposing you to a lawsuit. When Will | Need To Update My Living Trust? There is no special time to change your trust, although it is a good idea to review your living trust at least every year. As a general rule, you should change your trust anytime it no longer is what you want. Any major change in your family, such as marriage, divorce, death, adoption, birth, etc. should cause you to think about your trust. If one of your trustees/guardians can no longer fulfill their responsibilities you should make changes accordingly.

Remember that you should keep a separate list of your Special Gifts. How Do | Fund My Trust? YOU CAN FUND YOUR TRUST BY THE FOLLOWING THREE STEPS: 41. Go to your bank and change the name.on savings, money market and certificate of deposit accounts to the name of the family trust. Also, place trust in safety deposit box.

2. If you own stocks or bonds, contact your stock broker to change the name to the name of the family trust.

3. Finally, if you have real estate, you may use. the Quick-Claim Deed to transfer it yourself or you may contact a title company to transfer the title to the name of the family trust.

IF YOU HAVE ANY QUESTIONS CONCERNING THE FUNDING OF YOUR TRUST, CALL PRE-PAID LEGAL AT 1-800-654-7757 <= ©°SS3, Amencan Assecaton for Senior Ccecs ~ PRE-PAID LEGAL SERVICES, INC.

982 Complaint EXHIBIT 2 isadvantages of Going Through Probate 2. Impounded or frozen accounts . Impounded safety deposit box . Probate court cost (10% or more) . Waiting period (1-3 years) 5. Attorney fees (very costly) 6. Administration fees 7. Public disclosures 8.. Impounded mail 9. Forced asset liquidations 10. Expensive litigation ll. Possible Federal Estate Taxes and/or State Inheritance Taxes BSS" Areccan -ssccates ‘er S2~er Dozen-s es Complaint 123 F.T.C.

EXHIBIT 2 eath Probate versus Revocable Living Trust Total Assets e@ Home @ Auto ® Cash e@ Land e CDs e@ Real Estate e Savings ® Life Insurance @ Checking ® Pension Anything of Value Living Trust Probate Process e You maintain control while you are alive ® Attorney Fees You name someone you trust to Impounded Assets ® Administrator Fees © Possible Contestibility aa Pee aiee death e@ Public Disclosure © No Delay . ® Privacy @ No Impounded Assets SPOUSE or Heirs 1-3 DAYS 1-3 YEARS es ©4881, Amencan Assocaton for Senor C.cz2s PRE-PAID LEGAL SERVICES, INC. 1011 982 Complaint EXHIBIT 2 reventing These Situations A LIVING TRUST WOULD HAVE PREVENTED THIS SITUATION: Martha had been a widow for just ane year when she put all of her property, including her house, into joint ownership with her married son. She did this thinking that when she died, her property would automatically go to her son without the need for probate. Several years later, her son and his wife separated and Martha decided to sell her house so she could move in with her son. But she soon discovered she could not sell the house without her daughter-in-law's signature on the deed. The daughter-in-law was still legally married to her son and was entitled by law to a “marital interest” in the property. The title company would not insure clear title to the buyer without the daughterin-law's signature because it was not clear what her “interest” would be — and the daughterin-law refused to sign unless she got part of the money when the house was sold. Martha was stuck! She did not know that joint ownership with a married person can include that person's spouse. And because Martha had placed her house in joint ownership, Martha lost control of her own home.

A LIVING TRUST WOULD HAVE PREVENTED THIS SITUATION: Bill and Agnes were an elderly couple who put everything they owned ... including their home and stock ... in their adult unmarried daughter's name. They believed that this would avoid probate and that all of their property would pass directly to their daughter who was an only child, when they were both gone. A year later, Bill died of a heart attack. Several months after that, the daughter was killed in an auto accident. Agnes never believed she would survive both her husband and daughter. To add to her distress, Agnes now owned nothing in her own name. Everything was in her daughter's name! She was forced to probate her daughter's estate to get back her own property. During this long process she had to rely on the court to grant her living expenses. Sometimes the court would approve expenses... sometimes not. And during a declining stock market, she helplessly watched the value of her stocks fall to only a fraction of their previous value because the court could not react in time for ther to be sold quickly enough. Agnes lost her financial independence plus a substantial portion of her assets to probate .. . just trying to get back what was hers in the first place. THE CONSEQUENCES IF A JOINT OWNER CANNOT SIGN: Mast married couples own their property jointly, and they assume that if one of them becomes disabled or incompetent, the other can continue to take care of their personal and financial aff~irs without interruption. But look at what happened to Henry and Mary:

Henry and Mary were successful and responsible adults. They made safe investments and planned carefully for their future. They owned everything jointly and even had WILLS, leaving everything to each other. But in just seconds their lives changed drameéically. Henry was in a tragic car accident, énc suffered extensive head injuries and axes t°dg* Arenson Aavcc acer “ce Fe-er Ticers Complaint 123 F.T.C.

EXHIBIT 2 brain damage. Mary could continue to write checks and pay their day to day bills because only one of their signatures was required on their checking account. But soon the cash started running out, and Mary realized she needed ta sell some of their investments, and maybe their house, to pay for Henry's care and the other bills. Mary was unable to sell any of their jointly owned property without both signatures, and since Henry could not sign his name, the only way Mary could sell their property was to place Henry into a probate guardianship and have the court sign for him. Henry's WILL was no help at all because he was still alive. Mary had no idea how expensive and cumbersome this legal “joint ownership” can be. Not only did she have to deal with Henry's situation and the effect of this tragedy on their personal lives, but she also had to deal with the court system. She was especially frustrated that she had to pay for the court to approve the sale of their own property and then get the court's approval on how Henry's.share of that money was spent — even when it was used to pay their personal bills and take care of Henry! When Henry finally died more than five years later, Mary found herself back in probate court — this time to probate Henry's WILL. oe THE SAME THING CAN EASILY HAPPEN TO YOU if you own property through joint ownership. Many older parents list their adult sons or daughters as joint owners on their property (especially real estate and C.D.s), mainly to avoid probate when they die. And many mistakenly assume that their adult child will automatically be able to take over for them if they become disabled or incompetent. Most people just do not know how easily joint ownership can lead to a probate guardianship: ©4SC+ Arreccan Asseciaton fer Sener Cece PRE-PAID LEGAL SERVICES, INC. 1013 982 Complaint EXHIBIT 2 OTHER MEMBERSHIP BENEFITS & SERVICES Complaint 123 F.T.C.

EXHIBIT 2 —— medical Air Ambulance Services Specialized Facilities ... often at distant locations, available to our members at NO out-of-pocket cost when the need arises.

Ten Separate Services... Some Lifesaving ... Some Peace of Mind:

EMERGENCY AIR TRANSPORTATION to any specialized hospital in the nation with what could be the single life sustaining element available to you or a member of your family.

ESCORT TRANSPORTATION for your spouse, family member or companion ta accompany you in flight if space permits. NON-INJURY TRANSPORTATION to have a family member flown round trip by common carrier to the city where you are hospitalized for more than seven days.

REPATRIATION, should the patient and his attending physician determine that recuperation nearer home is feasible, air transportation will be provided. ORGAN RETRIEVAL/ORGAN RECIPIENT TRANSPORTATION. If a member requires a heart, heart/lung, liver, kidney, lung, or pancreas transplant, this service will transport the organ to the recipient or fly the recipient candidate to the organ.

RETURN TRANSPORTATION either by air ambulance or scheduled air carrier for your return home.

MINOR CHILDREN RETURN, including an attendant, if necessary, when minor children are stranded as a result of you being hospitalized out of town. VEHICLE RETURN. Privately owned or rented cars, vans, motorhomes, or travel trailers left unattended as a result of the medical emergency will be returned to your residence.

e PHYSICAL REMAINS RETURWN. Will return mortal remains. $*SE1. Amercan Assecaton fer Sener C.cz21s PRE-PAID LEGAL SERVICES, INC.

Complaint EXHIBIT 2 Listen to What People Say About Medical Air Services: Louis C. Timm 716-328-3624 ® Rochester, New York “We could not have asked for better treatment, in fact we have been telling our friends about MASA.”

Lee and Violet Frost 618-832-6538 @ Anna, Illinois “We are satisfied with your service we take every opportunity to encourage friends to enroll in MASA."

Mrs. James (Thelma) Wilkinson 515-652-3244 e Ottumiba, lowa “We have only good thoughts and remarks to make of Medical Air Services.”

Mr. Victor S. Kalinoski 218-681-4767 e Thief River Falls, Minnesota “It was a 400 mile trip one way. We were very pleased in that no time was wasted and everything seemed very well planned. We recommend this service very highly."

Harold and Ruth Wende 715-229-2770 @« Owen, Wisconsin |5 1 14 1 1 2 634 1681 44 18 89.783768 am5 1 14 1 1 3 690 1681 57 18 94.133415 now5 1 14 1 1 4 759 1676 52 24 90.962608 wells 1 14 1 1 5 822 1682 30 18 95.845268 on5 1 14 1 1 6 867 1677 41 23 96.271782 thes 1 14 1 1 7 921 1683 54 23 96.150032 ways 1 14 1 1 8 986 1681 25 19 93.155174 tc5 1 14 1 1 9 1024 1671 124 33 96.691536 recovery5 1 14 1 1 10 1158 1674 65 24 95.264748 from5 1 14 1 1 11 1236 1680 66 22 96.746384 open4 1 14 1 2 0 603 1707 699 30 -1 5 1 14 1 2 1 603 1707 77 24 95.580704 hearts 1 14 1 2 2 692 1714 109 23 95.580704 surgery5 1 14 1 2 3 814 1709 65 23 95.692574 while5 1 14 1 2 4 891 1708 21 24 95.692574 in5 1 14 1 2 5 929 1708 72 25 96.070518 Texas5 1 14 1 2 6 1011 1709 23 23 93.276451 in5 1 14 1 2 7 1047 1708 68 28 86.382271 Apni,5 1 14 1 2 8 1133 1708 43 23 96.808861 We5 1 14 1 2 9 1191 1712 111 22 96.384232 express4 1 14 1 3 0 602 1738 700 30 -1 5 1 14 1 3 1 602 1746 46 17 96.109459 ours 1 14 1 3 2 657 1740 98 28 96.109459 specials 1 14 1 3 3 765 1740 92 24 96.023048 thanks5 1 14 1 3 4 867 1740 38 24 96.023048 for5 1 14 1 3 5 915 1741 45 23 96.954880 thes 1 14 1 3 6 970 1741 47 23 96.449562 fines 1 14 1 3 7 1027 1740 51 24 95.684502 ands 1 14 1 3 8 1083 1743 105 25 95.684502 prompt5 1 14 1 3 9 1199 1738 103 25 96.564972 service4 1 14 1 4 0 602 1772 698 30 -1 5 1 14 1 4 1 602 1772 110 24 96.027672 Medical5 1 14 1 4 2 724 1773 44 23 96.027672 Air5 1 14 1 4 3 783 1773 119 24 96.682259 Services5 1 14 1 4 4 917 1773 118 29 96.600540 provided5 1 14 1 4 5 1051 1773 85 29 96.644730 during5 1 14 1 4 6 1152 1779 48 17 93.254906 ours 1 14 1 4 7 1215 1777 85 19 90.482231 emer-4 1 14 1 5 0 599 1804 700 31 -1 5 1 14 1 5 1 599 1811 84 22 96.468689 gency.5 1 14 1 5 2 697 1804 111 25 89.028290 Besides5 1 14 1 5 3 818 1806 123 29 96.687790 providing5 1 14 1 5 4 950 1806 39 24 96.672562 air5 1 14 1 5 5 997 1806 100 23 96.495461 services 1 14 1 5 6 1108 1806 80 25 96.494576 home,5 1 14 1 5 7 1205 1810 37 18 92.828842 we5 1 14 1 5 8 1254 1810 45 17 91.545509 es-4 1 14 1 6 0 598 1837 701 31 -1 5 1 14 1 6 1 598 1837 103 29 96.225578 pecially5 1 14 1 6 2 710 1839 166 27 95.895828 appreciated5 1 14 1 6 3 883 1839 87 29 96.539925 having5 1 14 1 6 4 979 1845 17 17 95.466713 a5 1 14 1 6 5 1005 1838 81 24 85.685081 drivers 1 14 1 6 6 1097 1838 59 24 95.894882 takes 1 14 1 6 7 1167 1844 48 18 54.787106 ours 1 14 1 6 8 1223 1840 76 21 90.050446 auto-4 1 14 1 7 0 598 1869 462 26 -1 5 1 14 1 7 1 598 1870 89 23 91.505356 mobiles 1 14 1 7 2 700 1869 73 25 96.459602 17005 1 14 1 7 3 779 1870 73 25 96.587799 miles5 1 14 1 7 4 862 1875 26 20 96.280785 ta5 1 14 1 7 5 900 1870 160 25 89.879608 Wisconsin.”2 1 15 0 0 0 593 1939 702 181 -1 3 1 15 1 0 0 594 1939 318 26 -1 4 1 15 1 1 0 594 1939 318 26 -1 5 1 15 1 1 1 594 1939 140 25 96.173737 Christine5 1 15 1 1 2 743 1940 24 23 96.003128 J.5 1 15 1 1 3 777 1941 135 24 95.913399 Adamson3 1 15 2 0 0 595 1981 494 32 -1 4 1 15 2 1 0 595 1981 494 32 -1 5 1 15 2 1 1 595 1981 217 26 87.225479 313-659-60805 1 15 2 1 2 814 1977 14 40 86.457047 «5 1 15 2 1 3 844 1983 112 30 94.825958 Flushing,5 1 15 2 1 4 969 1983 120 29 96.496384 Michigan3 1 15 3 0 0 593 2028 702 92 -1 4 1 15 3 1 0 598 2028 697 31 -1 5 1 15 3 1 1 598 2028 55 23 92.858185 “We5 1 15 3 1 2 660 2028 50 24 94.490143 feels 1 15 3 1 3 716 2029 50 24 96.776573 this5 1 15 3 1 4 773 2029 99 25 79.656570 services 1 15 3 1 5 877 2030 21 24 79.656570 is5 1 15 3 1 6 906 2037 58 22 96.889984 very5 1 15 3 1 7 972 2030 105 24 96.396805 valuable5 1 15 3 1 8 1083 2029 40 24 93.403580 for5 1 15 3 1 9 1128 2031 45 22 93.403580 thes 1 15 3 1 10 1179 2028 116 28 96.752403 security4 1 15 3 2 0 593 2061 700 27 -1 5 1 15 3 2 1 593 2061 19 23 96.197754 it5 1 15 3 2 2 621 2061 120 27 96.813766 provided5 1 15 3 2 3 749 2062 52 24 96.968178 ands 1 15 3 2 4 811 2068 37 18 96.911522 we5 1 15 3 2 5 858 2062 48 24 96.014580 feels 1 15 3 2 6 914 2064 20 23 94.339378 it5 1 15 3 2 7 943 2064 22 23 94.339378 is5 1 15 3 2 8 975 2068 47 18 96.900154 ones 1 15 3 2 9 1033 2062 29 23 96.956947 of5 1 15 3 2 10 1070 2063 43 23 97.014008 thes 1 15 3 2 11 1124 2062 63 24 93.040756 best5 1 15 3 2 12 1196 2062 97 22 84.291916 invest-4 1 15 3 3 0 593 2094 382 26 -1 5 1 15 3 3 1 593 2098 88 19 96.281013 ments5 1 15 3 3 2 692 2101 37 16 96.054314 we5 1 15 3 3 3 738 2094 65 24 96.286530 have5 1 15 3 3 4 813 2101 60 18 94.652618 ever5 1 15 3 3 5 879 2096 96 24 89.831612 made.”2 1 16 0 0 0 588 2163 513 69 -1 3 1 16 1 0 0 588 2163 513 69 -1 4 1 16 1 1 0 588 2163 178 24 -1 5 1 16 1 1 1 588 2163 88 23 93.282524 Bruce5 1 16 1 1 2 687 2164 79 23 88.911713 Theel4 1 16 1 2 0 590 2204 511 28 -1 5 1 16 1 2 1 590 2204 211 25 92.832199 701-477-52445 1 16 1 2 2 813 2215 11 11 91.821487 e5 1 16 1 2 3 836 2206 66 26 95.851173 Rolla,5 1 16 1 2 4 914 2208 78 23 40.591007 North5 1 16 1 2 5 1004 2208 97 23 95.500656 Dakota2 1 17 0 0 0 581 2251 707 190 -1 3 1 17 1 0 0 581 2251 707 190 -1 4 1 17 1 1 0 591 2251 697 32 -1 5 1 17 1 1 1 591 2251 69 23 95.522316 “Yours 1 17 1 1 2 666 2257 108 24 93.169266 company5 1 17 1 1 3 797 2260 21 16 48.527187 's5 1 17 1 1 4 824 2255 121 28 0.000000 providing5 1 17 1 1 5 952 2260 15 17 91.437958 a5 1 17 1 1 6 974 2254 94 23 60.440315 critical5 1 17 1 1 7 1072 2253 109 23 87.392410 megical5 1 17 1 1 8 1186 2252 102 24 96.640198 service4 1 17 1 2 0 587 2285 701 30 -1 5 1 17 1 2 1 587 2288 27 18 89.285637 to5 1 17 1 2 2 630 2285 45 22 95.925308 thes 1 17 1 2 3 688 2286 143 27 37.781185 populations 1 17 1 2 4 846 2287 65 28 91.223869 living5 1 17 1 2 5 926 2287 22 24 96.740059 in5 1 17 1 2 6 963 2292 100 19 89.750580 remote5 1 17 1 2 7 1078 2292 83 19 95.900352 areas,5 1 17 1 2 8 1182 2286 106 23 90.902908 without4 1 17 1 3 0 584 2316 704 32 -1 5 1 17 1 3 1 584 2322 36 16 96.149918 air5 1 17 1 3 2 629 2316 114 25 95.089951 facilities5 1 17 1 3 3 752 2319 86 23 96.872803 closer5 1 17 1 3 4 847 2323 26 19 96.872803 to5 1 17 1 3 5 883 2320 78 28 96.497673 majors 1 17 1 3 6 969 2319 105 24 96.014824 medical5 1 17 1 3 7 1083 2323 112 20 96.014824 centers.5 1 17 1 3 8 1207 2317 81 24 95.843864 Could4 1 17 1 4 0 584 2350 700 29 -1 5 1 17 1 4 1 584 2355 46 21 96.604958 you5 1 17 1 4 2 647 2350 48 23 90.891037 sells 1 17 1 4 3 709 2351 124 28 96.499893 hospitals5 1 17 1 4 4 850 2354 62 21 96.171608 such5 1 17 1 4 5 930 2359 15 17 89.873665 a5 1 17 1 4 6 962 2353 103 25 96.176430 service,5 1 17 1 4 7 1085 2358 31 18 95.917236 so5 1 17 1 4 8 1136 2353 58 23 96.309959 that5 1 17 1 4 9 1210 2356 74 18 96.331818 more4 1 17 1 5 0 582 2383 702 30 -1 5 1 17 1 5 1 582 2383 88 25 93.494591 peoples 1 17 1 5 2 681 2389 45 16 95.538139 ares 1 17 1 5 3 738 2383 123 24 0.000000 informed5 1 17 1 5 4 870 2384 29 24 96.923660 of5 1 17 1 5 5 908 2386 49 22 95.032310 this5 1 17 1 5 6 967 2385 143 24 96.250816 marvelous5 1 17 1 5 7 1122 2384 101 24 96.382660 services 1 17 1 5 8 1236 2390 48 23 96.382660 you4 1 17 1 6 0 581 2418 446 23 -1 5 1 17 1 6 1 581 2420 52 21 91.296494 Gives 1 17 1 6 2 643 2419 29 19 82.157379 2€5 1 17 1 6 3 683 2418 63 20 33.707718 SUCH5 1 17 1 6 4 758 2422 13 16 62.114609 45 1 17 1 6 5 782 2419 148 21 49.441837 resscnecie5 1 17 1 6 6 940 2418 87 23 81.383316 rate? Katherine G. Bennett 716-637-6468 Brockport, New York “The Bennetts are staunch believers that everyone should be a member of Medical Air Services. You showed concern far beyond the service anyone could expect.”

Margaret Kreutzer 204-326-9972 « Edinburg, Texas “lam very pleased with the services | received from your compeny after the death of my husband." Frankie Adkins 512-428-2534 e Brunswick, Missouri We5 1 21 2 1 2 1446 1216 72 23 96.241005 made5 1 21 2 1 3 1527 1222 15 17 95.904305 a5 1 21 2 1 4 1551 1216 47 23 93.344254 calls 1 21 2 1 5 1605 1219 27 20 95.654884 ta5 1 21 2 1 6 1641 1215 105 24 96.372299 Medical5 1 21 2 1 7 1752 1216 42 24 96.960770 Air5 1 21 2 1 8 1800 1216 117 24 96.132599 Services5 1 21 2 1 9 1925 1215 50 24 96.132599 ands 1 21 2 1 10 1981 1213 77 26 78.682648 found4 1 21 2 2 0 1377 1248 679 30 -1 5 1 21 2 2 1 1377 1254 45 20 94.819771 outs 1 21 2 2 2 1436 1255 46 18 95.579033 ours 1 21 2 2 3 1494 1248 139 30 47.146378 daughter's5 1 21 2 2 4 1648 1248 65 30 75.907028 Might5 1 21 2 2 5 1727 1252 27 21 96.215706 to5 1 21 2 2 6 1768 1248 31 24 96.919487 be5 1 21 2 2 7 1814 1248 56 25 96.306877 with5 1 21 2 2 8 1884 1249 45 23 96.187447 hers 1 21 2 2 9 1942 1248 114 29 96.791908 critically4 1 21 2 3 0 1376 1281 679 29 -1 5 1 21 2 3 1 1376 1284 21 22 80.678650 ills 1 21 2 3 2 1404 1282 82 24 96.161415 father5 1 21 2 3 3 1494 1281 77 25 95.926819 would5 1 21 2 3 4 1576 1281 32 24 96.323685 be5 1 21 2 3 5 1617 1281 73 24 96.323685 taken5 1 21 2 3 6 1698 1287 59 19 96.816154 cares 1 21 2 3 7 1765 1281 28 24 88.708710 of.5 1 21 2 3 8 1805 1281 43 25 96.220856 We5 1 21 2 3 9 1856 1281 115 29 96.462059 certainly5 1 21 2 3 10 1980 1281 75 24 96.379082 thank4 1 21 2 4 0 1376 1314 677 32 -1 5 1 21 2 4 1 1376 1322 61 24 96.887352 yours 1 21 2 4 2 1450 1314 74 30 95.836464 “flights 1 21 2 4 3 1536 1314 39 24 96.774582 for5 1 21 2 4 4 1584 1314 52 24 87.155571 life service and don't intend to be without it.”

Mrs. Joyce Evans 816-638-4561: e Urich, Missouri “Words cannot express what | feel for your company. You were all so helpful and courteous. | would love to enroll some of my friends who have not heard of your Services. Please send me some enrollment applications.”

Stanley Snodgrass 513-922-4562 e Cincinnati, Ohio.

MASA will always be a part of our insurance program as long as it is available to us. On a scale of one to ten, we rate you 4 ten plus.”

Mr. and Mrs. Robert Taylor 612-894-9709 « Burnsville, Minnesota “We wish to thank you for the “hassle free” way in which you handled all the arrangements to fly me and my injured husband home after he fractured a vertedra in his back. We say thanks for all your help.”

Helen Redekal 507-928-4241 » Canby, Minnesota “In this day and age it is very difficult to believe some company would stand behind their promises and react sa efficiently and promptly in our crisis. | highly recommend this service ta esch end everyone.”

Ws un Complaint 123 F.T.C.

EXHIBIT 2 RX! Prescription Program The lowest price available at your local pharmacy! ® Over 30,000 participating neighborhood pharmacies © Fill all your prescription needs AT or BELOW average wholesale prices ail Order Pharmacy f= The preferred option for maintenance medications! e TOLL FREE ORDER — Comparison cost line ® NO shipping or handling charges e Doctor-Verified prescriptions e Easy to use e Convenient at-home delivery Savings that really add up! , 81291 Smercan Assoc:auon tor Sener C.uzers PRE-PAID LEGAL SERVICES, INC.

982° Complaint EXHIBIT 2.

fy tfordable Dental Connection Free & Discounted Dental Service « FREE Diagnosis: E e FREE Dental History m4 e FREE Bite ‘Wing X- Rays ¢ FREE Flouride Treatment for Children.

FREE Oral Hygiene Instructions FREE Oral Cancer Examination Discounts of 20% to 50% off the Dental Providers “usual and customary” fees. e Prosthodontists e General Dentistry _e implantologists _e Orthodontists “e Oral Surgeons e Endodontists Complaint 123 F.T.C, EXHIBIT 2 yewear Savings SPECS brings you savings at Sears, Montgomery Ward, JC Penney, Dillards, | Marshall Fields, Royal Optical, and | many other stores. | It's so easy! There's no waiting, no forms to You receive the SPECS Vision Plan free as. part of your membership. benefit package. : The SPECS Vision Plan is designed to offer . both you and your: family savings ‘of up to 60% on all your eyecare needs.

complete, and na limitations — all merchandise is included. Most locations are open evenings and weekends for your convenience. And, you can pay for your order with your Simply present the SPECS card at any of Stare credit ere. the 1,500 participating Sears, Montgomery Ward, JC Penney, Dillard's, Marshall Fields, Royal Optical and many other eyewear departments located throughout the country and let the savings begin.

TYPICAL SAVINGS YOUR Frames Cost Frames up to $54 retail — you save GO% ...... 62. s cece eee eens eens $20.00 - { Frames $55 to $74 — you save GO% 1... . cess cece eee eee eee eee $30.00 | ErameDOveruerA |e cis swale neap ua dus Banana Be seeacecscqiok ahae Sante 50% off Lenses Single Vision — you save 45%o .. 2.2... ieee eee eee eee eee eens $28.00 Bifocal — you save 40% ..... 6... eee eee eens J damaere es eee oh be Reemned $50.00 WtoGal Yo Save AON 2s nsaorewa ca eae rai rea sar oas6vien dwanpine $60.00 Lenticular — you save 50% ... 2... 222. ee eee eee eee tee eee eres $95.00 Cantact Lenses & Non-Prescription Sunglasses 2 20% Discount from regular retail prices ‘ ; Eye Examinations= Spectacle: S5 off regular fee Contact: 510 off regular fee *£ye Examinations are prowded by Doctors of Optometry located in or adjacent to most participating optical departments. The fee for ficzing and dispensing spectacies Gnclucing unlimited acjusuments) is only S28. There 1s no discensing fee for cantaczs.

e-CS*, Amercan +ssociaton tor Sewer Cozers PRE-PAID LEGAL SERVICES, INC. 1019 982 Complaint EXHIBIT 2 hearing Aid Discounts Save 60% or MORE! e All world famous name brands.

e When is a $400 hearing aid better than an S800 hearing aid? When it's the same hearing aid!! 30 day No cost - No obligation FREE home trial Hear better today! [# hiropractic Discounts Nationwide network of over 2200 licensed chiropractors. <A | @ Free Chiropractic Evaluation! @ Preferred Client 15% discount.

Hesdaches @ Neck Pain @ Pain In Lower Back, Hips or Legs Tight Muscles or Spasms @ Decreased Flexibility Abdominal Pain @ Dizziness or Blurred Vision Skaulder or Arm Pain @ Numbness in Extremities Breathing Difficulties Get rid of that pain! == Maar scr eho er bsece Dc 2er5 Complaint 123 F.T.C.

EXHIBIT 2 discount Shopping Service Members save up to 50% on thousands of nationally advertised items.

As a Member you'll enjoy huge savings through substantial discounts on most major consumer purchases. It's easy. Just pick up the phone and you'll receive the guaranteed lowest price available for the item you want. Use your price to comparison shop at your local stores.

® Sewing Machines e Video Recorders @ Exercise Equipment ® Audio Equipment - ® Cameras -® Carpeting ® China and Silverware e Televisions ® Typewriters @ Video Tapes ®@ Diamonds ® -Fine Jewelry @ Furniture ® Binoculars e Air Conditioners ® Personal Computers e Luggage @ Major Appliances Plus thousands of other items! Pianos and Organs - You'll save hundreds of dollars! ©7591, Amencan Assccaton for Senror C:t-zens PRE-PAID LEGAL SERVICES, INC. 1021 982 Complaint EXHIBIT 2 IG! rocery Coupon Program Manufacturers coupons for brand ene name items you want, ar need, and use!!! Save hundreds and hundreds of dollars each year on your grocery bills.

_ Saving Money on groceries has never been easier.

Complaint EXHIBIT 2 itt Catalog Savings Galore! Our members SAVE Over 550 Items! up to GO% Cameras e Jewelry e Household Appliances ¢ Silver Plate Luggage e China e Watches « Telephones Silverware e Tools e LeatherGoods e Fur Coats Receive impressive savings on gifts for Greductiorr Chitra : Suggested Item Retail Your Price Ladies or mens quartz Diamond Watch............0..-2000s ie 2 5 S| 6 Pee ee S 23.00 35mm Camera - auto focus, auto wind, auto loading............... S$ 269.00: 522 sccetice sabre saan S 69.00 Cordless telephone...........-.-.4-+ BS A/ SOO s 223 is detegeees peak S 593.00 Ladies Black Eel-Skin purse.......... SSASOO. tise na Sat vaste he ae-a0 S 69.00 Norwegian blue Fox fur coat.......... AION 3.2 bt RG heFae 550 kode od $256.00 o°SS1, Amercsn Asscc:aton ‘or Senier C.czers a PRE-PAID LEGAL SERVICES, INC. 1023 982 Complaint EXHIBIT 2 cation & Travel Discounts Your membership travel services are waiting for you NOW. Let our travel consultants accommadate you! e Prompt, courteous, professional assistance e Lowest currently available air fares @ Upto 5% off on air fares to many destinations worldwide a © $100,000 FREE Travel Accident Insurance on selected flights e Discounts from many of the world's most desired resorts, cruise lines, and tour packages Get that dream vacation! otel, Motel, Resort Condominium Discounts Guarantees 50% Savings e At over 2000 hotels, motels, and resort condominiums.

e Available at thousands of destinations worlwide.

he world can be yours! e°CS* Areccain Asscest.ce ‘cr Sewer Dusers Complaint 123 F.T.C.

EXHIBIT 2 ew Car Discounts Save $1000 or MORE! For a nominal service charge you'll receive a computer printout showing the dealers cost for the make and model you want.

Information that gives you a price advantage! Knowing what your dealer knows can get you the very best price on the car you want sed Car Discounts Outstanding savings on late-model pre-owned cars.

For a modest fee, you will receive a price quote for the late-model car of your choice that will also include the retail price and trade-in value..

Make your best deal! Every car is prepared for sale under guidelines which meet the highest standards and conditions. €°S54, Amercan Assoc:aten ‘or Sewor C.ccens wo PRE-PAID LEGAL SERVICES, INC. 1025 982 Complaint EXHIBIT 2 ree Kodak Film A &350 Value!! @ Our members are provided certificates for 10 FREE rolls of KODAK Color Film. © Send ina roll of film for processing - Receive a new roll of film FREE. ®@ MONEY BACK GUARANTEE: You pay only for the prints that came aut! iscounts on Flowers Fresh & Beautiful @ Over 5,000 participating Florists worldwide. e Open 24 hours a day — 7 days a week ar Rental Discounts SAVE 10% to 40% every time you rent a car! e Free upgrade in car class at Hertz, Avis, National. @ Special exclusive flat-rates at National and Alama. family Entertainment Discounts At such places as: FUNSEEKERS CLUB Ringo Bales Marko.

And we ére negotiating new entertainment discounts every day that will be acded to your mémbership as available! Something for everyone! SSS) Ameccsr Assacaccr ‘or Sercr Leocers Complaint 123 F.T.C.

EXHIBIT 2 AAS NATIONWIDE NON-PROFIT ORGANIZATION PRE-PAID LEGAL SERVICES, INC. 1027 982 Decision and Order DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondent named in the caption hereof, and the respondent having been furnished thereafter with a copy of a draft of complaint which the Denver Regional Office proposed to present to the Commission for its consideration and which, if issued by the Commission, would charge respondent with violation of the Federal Trade Commission Act; and The respondent, its attorney, and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondent of all the jurisdictional facts set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is for settlement purposes only and does not constitute an admission by respondent that the law has been violated as alleged in such complaint, or that the facts as alleged in such complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the Commission's Rules; and The Commission having thereafter considered the matter and having determined that it had reason to believe that the respondent has violated the said Act, and that a complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of sixty (60) days, now in further conformity with the procedure prescribed in Section 2.34 of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings and enters the following order:

1. Respondent Pre-Paid Legal Services, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Oklahoma, with its office and principal place of business located at 321 E. Main Street, in the City of Ada, State of Oklahoma.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent, and the proceeding is in the public interest. ° DEFINITIONS For purposes of this order:

Decision and Order 123 F.T.C.

a. Living5 1 3 1 1 3 808 396 134 42 94.878387 trust means a trust into which an individual can place all of his or her assets during his or her lifetime and, by transferring ownership of ‘the assets to the name of the trust, thereby remove the assets from the individual's estate.

b. Probate is the legal process that validates a will, the legal document that contains instructions to the court on how assets and liabilities are to be divided and distributed at death. ORDER I.

It is ordered, That respondent Pre-Paid Legal Services, Inc., a corporation, its successors and assigns, and its officers, and respondent's agents, representatives, and employees, directly or through any corporation, subsidiary, division, or other device, including through any individual or entity with whom or which respondent has contracted to provide pre-paid legal services, in connection with the advertising, promoting, offering for sale, or sale of living trusts, do forthwith cease and desist from misrepresenting, in any manner, directly or by implication, orally or in writing, that: A. The use of a living trust avoids all probate and administrative costs.

At death, a living trust allows assets to be distributed immediately or almost immediately.

A living trust cannot be challenged.

Living trusts are prepared by local attorneys. A living trust protects against catastrophic medical costs. A living trust is the appropriate estate planning device for every consumer.

There are no disadvantages to a living trust. a eee a Il.

It is further ordered, That respondent Pre-Paid Legal Services, Inc., a corporation, its successors and assigns, and its officers, and respondent's agents, representatives and employees, directly or through any corporation, subsidiary, division, or other device, including through any individual or entity with whom or which respondent has contracted to provide pre-paid legal services, in PRE-PAID LEGAL SERVICES, INC. 1029 982 Decision and Order connection with the offering for sale or sale of living trusts, do forthwith cease and desist from failing to disclose, clearly and conspicuously, in writing, and prior to the consummation of the sale, the following information:

A. Living trusts may be challenged on similar grounds as wills. B. Living trusts may not be appropriate in all instances, and all estate planning options should be examined before determining which estate plan best suits a particular individual's needs and wishes. II.

It is further ordered, That respondent Pre-Paid Legal Services, Inc., a corporation, its successors and assigns, and its officers, and respondent's agents, representatives and employees, directly or through any corporation, subsidiary, division, or other device, including through any individual or entity with whom or which respondent has contracted to provide pre-paid legal services, in connection with the offering for sale or sale of living trusts,. do forthwith cease and desist from failing to disclose, clearly and conspicuously, in writing, and prior to the consummation of the sale, the following information, if true:

A. The availability of informal probate under this state's statutes allows minimal or no contact with the courts and reduces the time required to probate a will.

B. The transfer of an individual's assets into the living trust is not included in the price of creating the living trust. C. It is the sole responsibility of the purchaser of the living trust to transfer assets into the trust.

D. Creditors have a longer period of time to file a claim against a living trust than against a probated estate. IV.

It is further ordered, That respondent Pre-Paid Legal Services, Inc., a corporation, its successors and assigns, and its officers, and respondent's agents, representatives and employees, directly or through any corporation, subsidiary, division, or other device, in connection with the advertising, promoting, offering for sale, or sale of living trusts by any individual or entity with whom or which Decision and Order 123 F.T.C.

respondent has contracted to provide pre-paid legal services, do forthwith cease and desist from failing to take reasonable steps sufficient to determine, commencing with the beginning of such a contractual relationship and continuing throughout the relationship, whether the promotion or sale involves any acts or practices prohibited by paragraphs I, II and III of this order. Such steps shall include, but are not limited to, evaluating, on a basis independent of the individual or entity. with whom or which respondent has contracted to provide pre-paid legal services, the terms or conditions of sale, the adequacy of any disclosures, the representations made and the truthfulness of these representations (for the purposes herein, evaluating may, but need not, include reviewing advertisements, sales scripts and sales manuals, interviewing officers and employees, ascertaining the number and nature of consumer complaints and blind testing of oral representations).

V.

“ Itis further ordered, That respondent Pre-Paid and its successors and assigns shall, in accordance with the provisions of this Part, offer a refund in the amount of one hundred sixty-five dollars ($165.00) to every purchaser of a living trust, except for (1) those purchasers residing in states with which Pre-Paid has previously settled, and (2) all other purchasers who have previously received refunds from either Pre-Paid or the American Association for Senior Citizens ("AASC"). A. Within thirty (30) days of the date that this order becomes final, respondent shall compile and submit to the Commission a current mailing list containing the names and last known addresses of all AASC members for whom living trusts were prepared by Pre-Paid and who reside in states with which Pre-Paid has not previously settled. Respondent shall also compile and submit to the Commission a list of all AASC members to whom respondent has paid refunds, indicating the amount of each refund and the date the refund was issued. In compiling these lists, respondent shall search all relevant records in the possession, custody, or control of the respondent, including but not limited to its unincorporated divisions, joint ventures, partnerships, operations under other names, affiliates, and all directors, officers, partners, employees, agents, consultants, franchisees, and any other person or entity, including independent contractors, working for or on behalf of any of the foregoing. PRE-PAID LEGAL SERVICES, INC. 1031 982 Decision and Order B. The Commission shall compile and maintain a list of consumers potentially eligible to receive refunds based on the information. respondent is required to produce pursuant to V.A, above, and supplemented by such further relevant information in the Commission's possession or that comes to the Commission's attention.

C. The Commission or its designated agent shall mail a notification letter substantially in the form set out in Appendix 1 to all persons the Commission has reason to believe are eligible consumers, to advise each of:. (a) the settlement with Pre-Paid, and (b) the consumer's right to receive a refund. D. The Commission shall enclose with each notification letter described in V.C, above, a claim form substantially in the formset out in Appendix 2. Refund eligibility shall be based on submission of such form, which has been signed by either the AASC member or the beneficiary, next-of-kin or other representative of the member, if the member is deceased.

E. Any potentially eligible consumer who does not submit a completed and executed claim form in response to the Commission's notification letter by the date specified in the notification letter shall not be eligible to participate in the distribution; provided, that the Commission may in its discretion accept and process an untimely response to the notification letter.

F. The funds from any returned checks, and checks not cashed within 60 days after the distribution date, shall be redeposited into the redress fund for possible redistribution. VI.

It is further ordered, That the consumer redress fund shall be established, administered, distributed and terminated under the direction and control of the Commission and/or its designated agent. Respondent shall be notified, upon request, as to how the consumer refunds are distributed, but shall have no right to contest the manner of distribution chosen by the Commission. Within 30 days of completing the distribution of refunds pursuant to Part V of this order, the Commission or its designated staff will provide written notification to the escrow agent specified in the Escrow Agreement attached as Appendix 3 to return to the Commission for transmittal to Pre-Paid any funds remaining in the escrow account that were not paid to consumers or to cover administrative costs of the escrow Decision and Order 123 F.T.C.

account. Nothing in this provision shall be construed to limit Pre- Paid's obligation under Parts V and VI of this order to provide consumer refunds.

Vil.

_ It is further ordered, That, for a period of three (3) years from the date of issuance of this order, respondent, and its successors and assigns, shall maintain and upon request make available to a representative of the Federal:'Trade Commission for inspection and copying all documents relating to the advertising, promoting, offering for sale, or sale of living trusts that are developed, written, reviewed, authorized, or used by respondent, its successors and assigns, its officers, and its agents, representatives and employees, directly or through any corporation, subsidiary, division, or other device, or by any: individual or entity with whom or which respondent has contracted to provide pre-paid legal services. . Vill.

_ It is further ordered, That respondent shall notify the Federal Trade Commission, through its Denver Regional Office unless otherwise directed, at least thirty (30) days prior to any proposed change in the respondent, such as dissolution, assignment, or sale resulting in the emergence of a successor corporation, the creation or dissolution of new corporations, subsidiaries or affiliates of the respondent, the planned filing of a bankruptcy petition, or any other corporate change that may affect compliance obligations arising out of this order.

IX.

It is further ordered, That respondent shall: A. Within thirty (30) days of service of this order upon it, provide a copy of this order to each of respondent's current principals, officers, directors and managers and to all personnel, agents and representatives who are or have been participating or engaging in any manner in respondent's sales activities relating to living trusts. B. For a period of three (3) years from the date of issuance of this order, provide a copy of this order to each of respondent's principals, officers, directors and managers, and to all personnel, agents and PRE-PAID LEGAL SERVICES, INC. 1033 982 Decision and Order representatives who are participating or engaging in any manner in respondent's sales activities relating to living trusts within three (3) days after the person assumes his or her position. X.

It is further ordered, That this order will terminate on April 4, 2017, or twenty years from the most recent date that the United States or the Federal Trade Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later; provided, however, that the filing of such a complaint will not affect the duration of: . A. Any paragraph in this order that terminates in less than cine years;

B. This order's application to any eeapandeat that is not sniretel as a defendant in such complaint; and C. This order if such complaint is filed after the onde has terminated pursuant to this paragraph.

Provided further, that if such complaint is dismissed or a federal court rules that the respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this paragraph as though the complaint was never filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

XI.

It is further ordered, That respondent shall, within sixty (60) days of service of this order upon it, and at such other times as the Federal Trade Commission may require, file with the Commission a report, in writing, setting forth in detail the manner and form in which it has complied with this order.

Decision and Order 123 F.T.C, APPENDIX 1 UNITED STATES OF AMERICA FEDERAL TRADE COMMISSION DENVER REGIONAL OFFICE 1961 Stout Street, Suite 1523 Denver, CO 80294-0101 (303) 844-2271 Dear AASC Member:

The Federal Trade Commission has entered into a settlement agreement with Pre-Paid Legal Services, Inc. ("Pre-Paid"), the organization which provided living trusts to members of the American Association for Senior Citizens ("AASC"). The FTC charge AASC and Pre-Paid with making certain misrepresentations, as well as with failing to disclose important information, in the course of marketing and selling living trusts. The agreement reached between Pre-Paid and the Federal Trade Commission is for settlement purposes only and does not constitute an admission of wrongdoing on the part of Pre-Paid.

In settlement of this matter, Pre-Paid has agreed to make partial refunds to AASC members. To be eligible for this refund, you must sign and return the enclosed claim form. If you have already received a refund from Pre-Paid or AASC, you are not eligible for this refund. Sincerely, Federal Trade Commission PRE-PAID LEGAL SERVICES, INC. 1035 982 Decision and Order APPENDIX 2 UNITED STATES OF AMERICA FEDERAL TRADE COMMISSION DENVER REGIONAL OFFICE 1961 Stout Street, Suite 1523 Denver, CO 80294-0101 (303) 844-2271 CLAIM FORM Name Address City/State/Zip This Claim Form is to be used in connection with your request for a refund from Pre-Paid Legal Services, Inc. ("Pre-Paid"). Please read the Letter enclosed with this Claim Form. THIS CLAIM FORM MUST BE RECEIVED BY THE FTC AT THE ADDRESS SHOWN ABOVE NO LATER THAN ,199_. (60 day turn-around). A selfaddressed envelope is provided for your convenience. Please affix the proper postage.

INSTRUCTIONS 1, Please check the appropriate box to indicate your status: [ ] Asamember of the American Association for Senior Citizens ("AASC"), I received a living trust from Pre-Paid Legal Services, Inc. I have not received a refund from either AASC or Pre-Paid. [] , the AASC member who received the living trust, is legally incompetent or deceased, and I am the beneficiary, next-of-kin or other representative of that person. Neither the AASC member nor myself, on behalf of that AASC member, has received a refund from either AASC or Pre-Paid.

2. If your name and/or address as they appear at the top of this form are different, or the information is otherwise incorrect, please enter the change(s) in the line(s) to the right.

PRIVACY ACT NOTICE This information is being collected in order to make a distribution of funds paid to the Federal Trade Commission in connection with an Agreement Containing Consent Order to Cease and Desist issued to Pre-Paid Legal Services, Inc. by the Commission pursuant to 15 U.S.C. 45. In addition, this information may be disclosed for other purposes authorized by the Privacy Act, 5 U.S.C. 552a, 47 Fed. Reg. 32,622, including disclosure to other government agencies. Failure to provide the requested information could delay processing or, in some cases, make it impossible for us to process your claim.

Under penalty of perjury, I certify that the foregoing is true and correct to the best of my knowledge and belief.

Signature Date Decision and Order 123 F.T.C.

APPENDIX 3 ESCROW AGREEMENT Whereas, Pre-Paid Legal Services, Inc. (""Pre-Paid" or proposed4 1 3 1 2 0 461 690 1641 59 -1 5 1 3 1 2 1 461 693 322 56 96.056427 respondent), has. agreed with the staff of the Federal Trade Commission ("the Staff") to settle a certain proposed complaint against it; and Whereas, as part of the settlement of the proposed complaint for alleged violations of Section 5 of the Federal Trade Commission Act ("FTC Act"), Pre-Paid and the staff have agreed that Pre-Paid will pay partial consumer refunds to those who purchased living trusts from the American Association for Senior Citizens ("AASC"); and Whereas, the staff requires as a condition of its recommendation of the proposed settlement to the Commission that one hundred thirty thousand dollars ($130,000) be held in escrow to secure payment of the redress, pending final approval of the settlement and issuance of the order by the Commission, before being disbursed as directed by the terms of the proposed Agreement Containing Consent Order to Cease and Desist;

Now, therefore, in consideration of the premises and mutual covenants, agreements and conditions herein contained, Pre-Paid and the staff do hereby agree to and with each other as follows: 1. Gilardi & Co., in its capacity as a redress contractor (FTC contract #L-1127), shall serve as the Escrow Agent. Within fortyeight (48) hours of signing the Proposed Agreement Containing Consent Order to Cease and Desist to the Commission for final approval, the proposed respondent shall pay to Escrow Agent the amount of one hundred thirty thousand dollars ($130,000), to be held in escrow in an interest-bearing account to secure payment of the refunds in trust for consumers, by depositing the same into an account ("the escrow fund") as designated by the Escrow Agent. Pre-Paid will pay said amount by a certified or cashier's check(s) or wire transfer. 2. Except as provided in paragraphs four and five of this Agreement and Part V of the proposed Agreement Containing Consent Order to Cease and Desist, proposed respondent agrees to make no claim to or demand for the return of the escrow fund or any portiion thereof, directly or indirectly, through counsel or otherwise, and, in the event of bankruptcy of proposed respondent, proposed respondent agrees that the funds are not part of the debtor's estate and that the estate does not have any claim or interest therein. PRE-PAID LEGAL SERVICES, INC. 1037 982 Decision and Order 3. The refund amounts so held in escrow shall be disbursed in accordance with the proposed Agreement Containing Consent Order to Cease and Desist executed by the parties. The Escrow Agent shall be compensated for its management of the escrow fund by the escrow fund.

4. This Agreement shall be irrevocable, and the escrow fund shall be used for no purpose other than payment of the consumer refunds as specified in the Agreement Containing Consent Order to Cease and Desist and to compensate Escrow Agent. The parties agree, however, that this fact is not and will not be interpreted as an admission or acknowledgment by either side that any dominion, title or interest, either legal or equitable, in the principal of the escrow fund remains in Pre-Paid. The Escrow Agent shall return to the Commission for transmittal to Pre-Paid any money remaining in the escrow fund after reimbursement to all consumers who request a refund as soon as practicable after the conclusion of the process of disbursement of the consumer refunds.

5. In the event that the proposed Agreement Containing Consent Order to Cease and Desist does not receive final approval from the Commission, the Escrow Agent shall terminate the escrow account and return all funds to the Commission for transmittal to proposed respondent. The parties agree, however, that this fact is not an admission or acknowledgment by either side that any dominion, title, or interest, either legal or equitable, in the principal of the funds remains in Pre-Paid.

In witness whereof, each of the parties caused this Escrow Agreement to be executed on its behalf by its duly authorized representatives.

Complaint 123 F.T.C.