A prepaid legal scam refers to a multilevel marketing company known as LegalShield that recruits individuals to sell prepaid legal plans. Prepaid legal plans are intended to allow customers to prepay for legal services that they might need. Such plan only cover initial consultations and do not save customers money in the long run, as stated by Nolo.
There are different levels of prepaid legal plans that cover various types of legal services, as reported by the American Bar association. Basic plans often cover items that individuals can do on their own, free of charge, such as filing court documents. Other plans only cover a minute amount of legal services and require customers to pay near-market fees for additional services. For many, paying for the plan does not benefit them financially when they do need to seek legal council.