Monday, Pre-Paid Legal Services Inc. revealed new memberships produced and new sales associates enrolled for the second quarter of fiscal 2006. During the quarter new sales associates enrolled declined 35% compared to the second quarter of 2005 which was the largest quarterly number of new recruits ever. Memberships produced decreased 17% while new membership fees written decreased 18% and active membership base increased 1% compared to the comparable period of the previous year.
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Sean on July 27th, 2006 at 3:40 pm
The numbers are correct, but from the outside a bit misleading. Even though we sold less memberships, the active membership base is up and that is key. At the end of last year Pre-Paid Legal began cracking down on associates who were selling hundreds or even thousands of memberships through “membership leads”. These leads are typically people responding to an online ad that need immediate legal help but don’t have plans to keep the membership. These memberships were bad for business and looked terrible to the stock holders because the would typically only stay on the books a couple of months. Since that time the numbers have decreased a bit but the active membership base is up meaning we are selling better memberships.