Vol. I Issue 3                                                                                                                       September 21, 2000

                 A Publication of the South Carolina Department of Consumer Affairs
                                                        Philip S. Porter, Administrator/Consumer Advocate

                                                        Prepaid Legal Services
         Prepaid legal services are                                   provider attorney who either handles               prepaid legal services company must
becoming increasingly popular in                                      the matter or refers it to a local                 register with the Department. Also,
South Carolina. Have you ever                                         attorney in the consumer’s area.                   legal services sales representatives
heard of prepaid legal services?                                               Indeed, prepaid legal                     must be appointed a representative
Perhaps not, but they have been                                       services may be convenient for the                 of a particular prepaid legal service
around for the past 25 years. The                                     consumer, yet, there are certain                   company by filing with the
state of South Carolina defines                                       cautions that a consumer must                      Department.
prepaid legal services as legal                                       consider prior to joining a prepaid                Please see the Consumer Checklist below
services provided by an individual                                    legal service group. The consumer                  prior to hiring legal counsel.
licensed or admitted to practice law
in the jurisdiction in which the
                                                                      should know what kinds of legal
                                                                      services he or she needs to make sure                CONSUMER
services are rendered, and which are
provided in return for a
                                                                      their specific needs are included in
                                                                      their contract. Know what is not                     CHECKLIST
predetermined specific periodic fee.                                  included. Many matters, such as
         Middle income North                                          DUI defense or domestic cases, are                 1. Know what kind of legal services
                                                                                                                         you need, or may anticipate needing.
Americans are the target of prepaid                                   excluded and some contracts are
legal services. Generally, a prepaid                                  limited to business or personal                    2. Before signing the contract, check
                                                                                                                         to see if it is a business or a personal
group appeals to consumers because                                    policies. The consumer should read                 policy.
finding an attorney can be expensive                                  and understand the contract prior to
and prepaid legal services provide a                                  signing. If the consumer is not                    3. See if the total cost covers legal fees
                                                                                                                         and the actual costs that may occur.
chance for consumers to have legal                                    satisfied with the answers that the
support at low monthly costs. The                                     sales representatives give to his or               4. Will a time arise that you may have
                                                                                                                         to pay beyond the agreed legal fees?
consumer buys into a plan and pays                                    her questions then the consumer
on a month to month basis.                                            should not sign the contract.                      5. Look at the exclusions stated in the
         Prepaid legal services’ plans                                         Another important step is                 contract.
operate like HMOs. A consumer                                         checking with the South Carolina                   6. Are you getting satisfactory
buys a plan that provides them with                                   Department of Consumer Affairs to                  answers from the salesperson?
certain legal services. When the                                      see if the prepaid legal service group             7. Most importantly, make sure that
need arises, the consumer contacts a                                  is registered. You can contact this                you have read and that you completely
                                                                      Department be calling 1-800-922-                   understand the contract.
                                                                               The South Carolina
     In this issue:                                                   Department of Consumer Affairs
     Prepaid Legal Services.............................1
     Consumer Checklist.................................1             licenses and regulates all prepaid
     Consumer Education................................2              legal services as of July 1, 2000.
     Fast Facts..................................................2
     Scams.......................................................2    That is, prior to commencing
                                                                      business in South Carolina, any
S.C. Department of Consumer Affairs                          3600 Forest Drive, Suite 300/P.O. Box 5757       Columbia, SC 29250   (803) 734-4190 or 1-800-922-1594
                                                               *All information in this newsletter may be copied and distributed
 Vol. I Issue 3                                                                                                        September 21, 2000

Teachers please discuss this concept               Facts for                                                 SCAMS
with your students!
The South Carolina Department of                   Consumers:                                           Online Auctions Top List of Internet
Consumer Affairs offers the                        Solving Consumer Problems:                            Fraud at Internet Fraud Center:
following services to consumers:                             Fast Facts:                                   In the year of Y2K, the number one
                                                                                                       source of fraud according to the FBI is
*Analysis and investigation of individual          *Whenever you have a problem with                   online auctions. This past year the FBI
                                                                                                       along with the Department of Justice
complaints;                                        a product or service, first discuss                 set up the Internet Fraud Complaint
*Investigation of business practices if            your complaint with the merchant.                   Center. Since it opened in May 2000,
patterns of fraud are indicated or suspected;      *If necessary, write a letter to the                the Center has received approximately
*Referral to agencies with direct
                                                   company’s consumer affairs office or                1,000 complaints a week. Though not
jurisdiction for immediate and specific                                                                fully up and running the Center expects
                                                   its president. Your letter should be                at least 1,000 complaints a day starting
*Public educational and informational              brief and to the point. See the                     November 2000 when the Center will
programs designed to educate the consumer          sample letter below.                                be linked to such major search engines
                                                   *You also might contact                             as Yahoo and America Online. The
about credit practices and problems, unfair                                                            FBI has referred some 4,000 cases to
and deceptive practices, remedies and relief       organizations and agencies that                     law enforcement agencies concerning
available to consumers;                            provide consumer assistance. In                     online auctions confirming suspicions
*Initiation of and participation in legal          addition, dispute resolution programs               fueled by tales of fraudulent paintings
actions to prevent individuals from                offer more substantive consumer                     and kidneys sold for transplants. The
violating the S.C. Consumer Protection                                                                 second most common complaint
                                                   assistance through mediation and                    received by the center is products that
Code, to prohibit unconscionable conduct,
                                                   arbitration.                                        are ordered but never received.
and to protect consumers from paying                                                                   Victims of this scam have lost an
excessive or unfairly discriminatory utility                                                           average of $800 and are mostly men.
and insurance rates;                                 Sample Complaint Letter:                          Some law enforcement agencies are ill
*Inform customers who file requests under                                                              prepared to handle the cases referred to
the Freedom of Information Act whether             (Your address)                                      them, says Richard Johnson, Director
complaints have been filed against a               (Your City, State, Zip Code)                        of the Justice Department’s National
                                                   (Date)                                              White Collar Crime Center, Inc.
particular company and how complaints
were resolved;                                     (Name of Contact Person)
                                                                                                       Therefore, the Internet Fraud
                                                   (Title)                                             Complaint Center was established to
*Legal representation of the public in utility                                                         help these law enforcement agencies.
and insurance rate and policy proceedings          (Company Title)
                                                   (Street Address)                                    Source: USA Today
before State and Federal regulatory                (City, State, Zip Code)
*Licensing and regulation of motor clubs,          Dear (Contact Person):
rent-to-own businesses, physical fitness                      On (date), I purchased (or had
service organizations, pawn brokers,               repaired) a (name of product with the serial
mortgage loan brokers, automobile brokers,         or model number or service performed). I
athletic agents, staff leasing companies,          made this purchase at (location, date, and
                                                   other important details of the transaction).
continuing care retirement communities,                       Unfortunately, your product (or
and telephone solicitations.                       service) has not performed well (or the
For more information see our web site:             service was inadequate) because (state the                           problem).
                                                              Therefore, to resolve the problem,
To Request Free Educational Materials              I would appreciate your (state the specific
or Arrange for a Speaker Contact:                  action you want). Enclosed are copies
Sherry King                                        (copies, NOT originals) of my records
                                                   (receipts, guarantees, warranties, canceled           Brandolyn Thomas C. Pinkston........Deputy
S.C. Department of Consumer Affairs
                                                   checks, contracts, model and serial                               Public Information & Education
3600 Forest Drive, P.O. Box 5757                   numbers, and any other documents).                    Sherry Gore King.........Education Coordinator
Columbia, SC 29250                                            I look forward to your reply and a
1-800-922-1594                                     resolution to my problem and will wait (set
(803)734-4195                                      a time limit) before seeking third-party              Shana Kinard........................Newsletter Editor
                                                   assistance. Please contact me at the above                               address or by phone (home or office
Consumer education should                          numbers with area codes).

start now!                                         Sincerely,
                                                   (Your Name)
                                                   (Your Account Number)

 S.C. Department of Consumer Affairs      3600 Forest Drive, Suite 300/P.O. Box 5757        Columbia, SC 29250     (803) 734-4190 or 1-800-922-1594
                                            *All information in this newsletter may be copied and distributed.
Vol. I Issue 3                                                                                                 September 21, 2000

S.C. Department of Consumer Affairs   3600 Forest Drive, Suite 300/P.O. Box 5757        Columbia, SC 29250   (803) 734-4190 or 1-800-922-1594
                                        *All information in this newsletter may be copied and distributed.