Identity Theft brochure _no color_ by pengxuebo


             e live in an information-oriented society. We create and exchange information on a
            daily basis, as we make purchases, pay bills, and complete other transactions with
            merchants, banking institutions, and on-line entities. This abundance of information has
given rise to a new crime - identity theft. Identity theft is a growing concern for everyone, including you,
your family, and your friends. So Pre-Paid Legal introduces the IDENTITY THEFT SHIELD, a new
benefit designed to aid you in the event that someone steals your identity.

 THE COMPANY:                                                        THE NEED:
   Pre-Paid Legal Services®, Inc. (New York Stock                      Identity theft is real, and it’s a growing threat. Up to
 Exchange: PPD) is a pioneer of the legal services                   700,000 people in the United States may be victimized
 industry. With more than 30 years of experience in                  by identity bandits each year, according to the Justice
 providing legal rights protection to individuals and                Department (press release - 2002 FTC Study), and the
 families, Pre-Paid Legal has now teamed with Kroll Inc.             Secret Service estimates that in 1997 consumers lost
 (Nasdaq:KROL), the world’s leading independent risk                 more than $745 million due to identity theft.
 consulting company. Kroll provides a broad range of
 investigative, intelligence, financial, security, and tech-           The average arrest rate (according to law
 nology services to help clients reduce risks, solve                 enforcement) is under 5% of all reported cases by
 problems, and capitalize on opportunities. Headquar-                victims.
 tered in New York with more than 60 offices on six                    Identity theft crimes include:
 continents, Kroll has a multidisciplinary corps of more               • credit card fraud
 than 2,200 employees and serves a global clientele of                 • phone/utility fraud
 law firms, financial institutions, corporations, nonprofit            • bank fraud
 institutions, government agencies, and individuals. Over              • employment related fraud
 the last three years, Kroll has developed a unique
 solution for victims of identity theft. This new service is
 now available to Pre-Paid Legal members through the

  THE SERVICE:                                                                            THE COST:
  • CREDIT REPORTS                                                                          On average, victims spend more
  Members of the Identity Theft Shield will receive a special membership kit,             than 175 hours and $1,500 in out-
  and in that kit will be a form you must sign in order to give Kroll authorization       of-pocket expenses to clear their
  to order credit reports and monitoring services on your behalf.                         names. (Privacy Rights Clearing-
                                                                                          house and FTC)
  • REGULAR MONITORING OF CREDIT ACTIVITIES                                                 With Pre-Paid Legal’s IDEN-
  Once activated your credit will be continuously monitor for activity, watching          TITY THEFT SHIELD, the cost of
  specifically for inquiries of your credit, new lines of credit, etc. Members can        combatting identity theft is much
  elect to receive information on-line and receive daily updates. Members                 less. For just $9.95/month, IDEN-
  without e-mail access will receive monthly updates by mail if activity occurs.          TITY THEFT SHIELD members
                                                                                          have the added security of knowing
  If an identity theft occurs, Kroll will assist with the steps necessary to              they have someone to fight the
  complete the identity theft restoration.                                                battle for them.
                                                                                            This benefit covers both the
  • INSURANCE                                                                             member and the member’s spouse.
  You’re covered with up to $25,000 of Insurance to reimburse you for most of
  the expenses (financial losses not included) you may incur while your
  Identity Theft issues are getting resolved.

                          (This material is for educational purposes only. Not for public distribution.)
IN THE NEWS:                                                               “Pre-Paid Legal is focused on
                                                                           its commitment to protect the

                                                                           legal rights of families and
          s the threat of identity theft continues to grow,                individuals. And with the growing
          more and more news media are discussing the                      threat of identity theft, it is only
          problem on almost a daily basis. Pick up a                       fitting that Pre-Paid Legal
newspaper, tune into a news program, or log-on to a news                   address this concern. We are
web page, and you’re likely to find information about this                 pleased to present the IDENTITY THEFT
growing concern.                                                           SHIELD, one more benefit in Pre-Paid Legal’s
                                                                           arsenal of legal rights protection.”

  A       clever crook could mix and match information on
          account records to create phony checks that could
be cashed or used to pay for merchandise. The charges . . .
                                                                           Harland Stonecipher
                                                                           Founder, Chairman and CEO
eventually would appear on the accounts of victims. Identity               Pre-Paid Legal Services®, Inc.
theft is an incredible violation of people’s privacy. It abso-
lutely devastates their credit, and it takes so long for them
to repair it.
  The Oregonian 11/4/02

  I n what may be one of the largest identity theft
    schemes to hit Staten Island, 15 people from Clifton and
Brooklyn have been indicted in connection with charges that
                                                                      Up to 700,000 people in the United States may be victim-
                                                                  ized by identity bandits each year, the Justice Department
                                                                  says. It costs the average victim more than $1,000 in
they used an employee list from a bus company to illegally        expenses to cope with the damage to their accounts and
obtain credit cards and purchase tens of thousands of             reputations, the FTC has said.
dollars in merchandise over the internet.                             “This is a crime that is almost solely on the shoulders of
  The State Island Advance 12/12/02                               the victim to resolve,” said Beth Givens, director of the
                                                                  Privacy Rights Clearinghouse, a San Diego-based consumer

  M      any people don’t know they’ve been victimized
         until their credit report is so damaged that they’re
rejected for a credit card, car loan or home mortgage. It can
                                                                  group. “They’re beleaguered, they’re tired, they’re angry and
                                                                  it takes them a good deal of time to recover.”
                                                                      USA Today 1/22/03
take months, even years, to repair. While identity theft is
one of the fastest-growing crimes in the USA, obtaining
credit reports is particularly scary. The credit report is the
mother lode of information.
                                                                    A    mericans are more worried about becoming a
                                                                          victim of identity theft than getting laid off, according
                                                                  to a survey by the ATM network Star Systems. More than
  USA Today 11/26/02                                              two-thirds of the respondents said they want the financial
                                                                  services industry to do more to tighten security and verify

  C    omplaints about identity theft nearly doubled in
       2002 as the fast-growing crime topped the
government’s list of consumer frauds for a third consecutive
                                                                  customers IDs.
                                                                    USA Today 4/22/03

year. The Federal Trade Commission reports that 43% of
roughly 380,000 complaints involved the hijacking of
someone’s identity information, such as credit card or
Social Security number, to steal money or commit fraud.

                          (This material is for educational purposes only. Not for public distribution.)
          he Identity Theft Shield gives you easy access to the            assist you every step of the way. A
          resources you need to understand your credit ratings . .         Fraud Restoration package with
          . and to fight back if an identity thief threatens your          complete and detailed materials, aids,
financial standing. Our services are designed to alert you to              and instructions will be rushed to you.
suspicious account activity . . . to restore any resulting damage
to your credit history . . . and to reimburse you for covered out-of-      If you sign a Limited Power of Attorney, you
pocket expenses you incur in the process.                                  will be entitled to Enhanced Restoration
                                                                           Services. Kroll will work with you to deter-
1.     Credit Report                                                       mine the extent of the fraud in your credit
       Make sure your financial records are accurate.                      and regarding your identity. On your behalf, Kroll will issue
      Your credit standing is one of your most important finan-            fraud alerts to the three major credit reporting bureaus, the
      cial assets. It not only affects your ability to get credit, it      Federal Trade Commission, the Social Security Adminis-
      often dictates the interest rate at which you can borrow. It         tration, and the United States Postal Service. Kroll will
      can also affect your ability to purchase insurance or to find        work with the bureaus, creditors, and collection agencies
      employment. Both insurance companies and prospective                 to restore your credit accuracy with regard to your identity
      employers use your credit rating to gauge your sense of              theft issues. If necessary and reasonable, Kroll will work
      responsibility.                                                      with law enforcement, the department of motor vehicles,
      Experts recommend you review your credit report regularly.           and other organizations to resolve your identity theft
      The Identity Theft Shield makes it easy. Members are                 issues
      entitled to an up-to-date credit report at no charge.
                                                                           If you decline the Limited Power of Attorney, you will receive
       Personal Credit Score and Analysis                                  Basic Consulting Services. Kroll will work with you to
      Know your credit score . . . and how it affects your ability         determine the extent of the fraud in your credit and
      to borrow.                                                           regarding your identity. Kroll will provide you with contact
      Your credit score is derived from the information in your            information and procedures for the organizations you will
      credit report. This score is used by lenders to determine            need to work with. Kroll will provide sample letters and
      your creditworthiness. The higher the number, the better             forms and be available to you through a toll-free phone
      your chance of being approved for the credit you want.               number for assistance and advice throughout the process
                                                                           of restoring your identity. (See exclusions on back)
      A detailed analysis of your Personal Credit Score will be
      included with your first Credit Report. You can use this          4. $25,000 Identity Theft
      analysis to evaluate your current credit standing.                   Insurance
                                                                            Pays your out-of-pocket expenses.
2.     Continuous Credit Monitoring                                        The average identity theft victim spends more than $1,500
      Learn of suspicious activity before your credit is ruined.           in their quest to clear their name. And that doesn’t include
      A professional thief can assume your identity in just a few          attorney’s fees, which could add thousands more in
      hours. But it can take years for you to repair your credit           expenses.
      standing. Early detection is key to minimizing the damage
      caused by thieves who steal you name.                                The Identity Theft Shield includes up to $25,000 in fraud
                                                                           insurance. This coverage will reimburse you for most of
      With your Identity Theft Shield membership, your credit              the expenses you incur while working to clear your name.
      files will be monitored daily. Suspicious activity will be           These include:
      brought to your attention, providing you with early detec-           • lost wages
      tion. You’ll receive prompt notice if any new accounts are           • the cost of notarizing affidavits or similar documents,
      opened in your name . . . or if negative notations are               long distance telephone calls, and even postage!
      added to your credit report.                                         • the cost of re-filing applications for loans, grants, or other
                                                                           credit instruments
3.     Fraud Restoration Assistance                                        • the cost of up to two additional credit reports per year
      Get personal assistance and advice from experts.                     • legal defense fees and expenses
      Any discrepancy in your credit report should be addressed            (See disclosures on back).
      at once. Call our Customer Services Department at the
      designated Identity Theft Shield number and explain your
      concerns. If it is identity theft, our fraud investigators will

                            (This material is for educational purposes only. Not for public distribution.)
INSURANCE BENEFITS                                                                reported to us within six months. You will
The insurance benefits of the Identity Theft Shield are underwritten by           not be covered if the stolen identity event first
AIG, and AIG shall pay covered members for the following:                         occurs after termination of the master policy or
a) Costs                                                                          termination of your membership in the Master
i. Reasonable and necessary costs incurred by you in the United States            Policyholder’s program.
for re-filling applications for loans, grants, or other credit instruments that
are rejected solely as a result of a stolen identity event;                       Limits of Insurance
ii. Reasonable and necessary costs incurred by you in the United States           The most we shall pay you are the Limits of
for notarizing affidavits or other similar documents, long distance               Insurance shown above. All Legal Costs shall be
telephone calls, and postage solely as a result of your efforts to report a       part of and subject to the Aggregate Limit of Insurance. Legal costs are
stolen identity event and/or amend or rectify records as to your true             part of, and not in addition to, the limit of insurance.
name or identity as a result of a stolen identity event;                          The Lost Wages Limit of Insurance shown above is a sublimit of the
iii. Reasonable and necessary costs up to $25,000 incurred by the                 Aggregate Limit of Insurance and $2,000 is the most we shall pay you
insured for up to two credit reports from established credit bureaus              for lost wages.
(with no more than two reports from any one credit bureau) dated within
12 months after your knowledge or discovery of a stolen identity event.           Other Insurance
                                                                                  We shall be excess over any other insurance, including, without
b) Lost Wages                                                                     limitation, homeowner’s or renter’s insurance. If you have other
Actual lost wages earned in the United States, whether partial or whole           insurance that applies to a loss under this policy, the other insurance
days, for time reasonably and necessarily taken off work and away                 shall pay first. This policy applies to the amount of loss that is in excess
from your work premises solely as a result of your efforts to amend or            of the Limit of Insurance of your other insurance and the total of all your
rectify records as to your true name or identity as a result of a stolen          deductibles and self-insured amounts under all such other insurance. In
identity event. Actual lost wages includes remuneration for vacation              no event shall we pay more than our Limits of Insurance as show above.
days, discretionary days, floating holidays, and paid personal days but
not for sick days or any cost arising from time taken from self-employ-           Duplicate Coverages
ment. Coverage is limited to wages lost (up to $500 per week for a                Should you be enrolled in more than one membership program insured by
maximum of 4 weeks) within 12 months after your discovery of a stolen             us, or any of our affiliates, we will reimburse you under each member-
identity event.                                                                   ship program:
                                                                                  a) subject to the applicable deductibles and limits of liability of each
c) Legal Defense Fees and Expenses                                                insured membership program
Reasonable and necessary fees and expenses incurred in the United                 b) but in no event shall the total amount reimbursed to you under all
States by you with our consent for an attorney approved by AIG for:               membership programs exceed the actual amount of loss.
i. Defending any civil suit brought against you by a creditor or collection
agency or entity acting on behalf of a creditor for non-payment of goods          RESTORATION SERVICE EXCLUSIONS
or services or default on a loan as a result of a stolen identity event; and      A. Family Member - Any stolen identity event of which a spouse or child
ii. Removing any civil judgment wrongfully entered against you as a               participated in, directed or had prior knowledge.
result of the stolen identity event.
A stolen identity event is the theft of your personal identification, social      B. Dishonest Acts - Any dishonest, criminal, malicious or fraudulent acts,
security number, or other method of identifying you, which has or could           if the covered person(s) that suffered the fraud personally participated
reasonably result in the wrongful use of such information, including but          in, directed, or had knowledge of such acts.
not limited to stolen identity events occurring on or arising out of your
use of the Internet. A stolen identity event does not include the theft or        C. Late Reporting - Fraud insurance will not cover any loss reported
unauthorized or illegal use of your business name, d/b/a or any other             more than 90 days after the discovery of potentially fraudulent activities.
method of identifying your business activity.
                                                                                  D. Pre-Existing Stolen Identity Event Limitations - Restoration services will
Coverage Scope                                                                    not be provided to covered persons for a pre-existing stolen identity
The Master Policy provides benefits to you only if you report a stolen            event if either covered person had knowledge of, or reasonably should
identity event to us by the contact number state above as soon as you             have had knowledge of, the pre-existing stolen identity event based on
become aware of a stolen identity event, but in no event later than six           information provided to them prior to enrollment in the program.
months after the stolen identity event occurs and you follow the
instructions given to you in a claims kit that you will be provided. This         E. Financial Loss - Membership services do not cover any financial
claims kit will also instruct you now to file for benefits under the policy if    losses attributed to the stolen identity event, including but not limited to,
the stolen identity event results in losses covered under the policy.             money stolen from a wallet, unauthorized purchases of retail goods or
You will only be covered if a stolen identity event first occurs while you        services online, by phone, mail or direct.
are a member of the Master Policyholder’s insured program and is

                                 (This material is for educational purposes only. Not for public distribution.)
                                                    & nswers
1. Can I sell this rider to existing members? Yes, you
can market to existing members residing in states where the rider
is available. To upgrade, your member simply needs to fill out a
new membership application and, check the “Other” box in the
upper right corner and write “PPL Identity Theft Shield” on the
line provided. New membership applications will be have an                   11. Who do I call if I suspect my identity has been
option to mark the PPL Identity Theft Shield box on the                      stolen? Call the number on your membership card. The consult-
                                                                             ants will be able to assist you in determining if your identity has
                                                                             been stolen and, if so, what step to take next.
2. Can I sell this rider by itself or only as a part of a
full membership? This rider must accompany a family plan
membership. It is not a stand-alone plan.                                    12. Will I have an ID card? Your Identity Theft Shield
                                                                             information will be on your Pre-Paid Legal Membership Card. You
3. If the membership is not effective until a future                         will receive a new card containing this information when you add
date, when will the first bank draft be deducted from                        the rider to your Family Plan.
my account, or the first credit card charge made? The
first draft or credit card charge will not be made until the plan is         13. I have credit card fraud protection service. Why do
effective in your state of residence. Upon the plan becoming                 I need this, too? Credit card fraud protection services only
available in your state or residence, the first draft or credit card         assist with instances regarding your credit card accounts. The
charge will be made within 5 days of that effective date.                    Identity Theft Shield monitors all of your credit lines: bank loans,
                                                                             mortgages, credit cards, etc.
4. Will I receive my materials with my Membership
Kit? Members will receive a rider to their membership contract               14. Does the service protect me and my family mem-
with their contract from Pre-Paid Legal Services®, Inc. The                  bers? This service covers you and your spouse if the spouse is
remaining Identity Theft Shield membership information will be               listed on your Family Plan membership.
sent in a different mailing than their Family Plan membership kit.
Once the member receives their packet, they should immediately               15. Can I add one of my children if they do not have
fill out and mail back the form that authorizes the ordering of              their own membership? A dependent child can be added to
their credit reports.                                                        your membership with the purchase of another rider.

5. Can I sell the rider to any member in the USA?                            16. How long does it take after I sign up for my mem-
The Rider will not initially be available in all states. The Company         bership to be effective? Once a state is open for sales,
will make announcements as the rider becomes available in each               membership applications will be processed in the normal course
state.                                                                       of business with all other applications.

6. Can I sell the rider to members in Canada?                                17. Does the rider cover me when I travel to foreign
The rider is currently not available in Canada.                              countries? What if my credit card is stolen in France?
                                                                             The rider covers instances that are reported to US Credit Bureaus
7. Will we be receiving any type of marketing                                only.
materials to help us sell the rider? Marketing materials will
be available for purchase through Marketing Services in the near             18. How does the $25,000 insurance work? Claims will be
future.                                                                      reported separately under the insurance plan directly to the
                                                                             Insurance Carrier.
8. If I have questions about the Identity Theft Shield,
who should I call? If you have questions regarding marketing                 19. How are commissions paid? Commissions for the rider
the Identity Theft Shield rider, contact Marketing Services. If you          will be advanced just as with other PPL plans and plan riders.
have questions regarding your PPL Identity Theft Shield member-
ship, contact Customer Care.                                                 20. How much does the rider cost? The member and
                                                                             spouse receive benefits under the rider for $9.95 per month. (The
9. Will I automatically get a free credit report as soon                     single member rate is also $9.95 per month.)
as I sign up? No, you must sign the form in your PPL Identity
Theft Shield membership packet that authorizes the credit report             21. Will I receive a counter for the rider? Yes, you will
request to be made on your behalf.                                           receive a counter for sales of the new rider.

10. Am I going to get an email every day regarding                           22. Do I have to authorize a Power of Attorney for the
my credit status? As a PPL Identity Theft Shield member, your                services to work? Yes, you must give authorization for a
credit will be monitored daily. Any activity such as requests for            Limited Power of Attorney in order to receive the maximum value
new lines of credit, inquiries on your credit, address changes for           of the Restoration services under the rider. However, considering
credit accounts, etc. will be reported to you daily by email. If you         the magnitude of the damage that can occur should your identity
do not supply an email address, you will receive a report monthly            be stolen, this is a relatively minor step in helping to restore your
by regular mail of any activity such as those listed above.                  identity.
                                     (This material is for educational purposes only. Not for public distribution.)

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