Pre-Paid Toll Mounts

For years, Pre-Paid has been accused of overselling both its product and its so-called business opportunity. The company has consistently denied any wrongdoing and, until recently, has managed to avoid any major backlash for its alleged misconduct.

As a matter of policy, Pre-Paid refuses to comment for stories by TheStreet.com because it believes the coverage is biased against the company.

In its latest quarterly report, Pre-Paid disclosed one of the first-ever regulatory probes of the company. Specifically, the company said it has fielded a so-called civil investigative demand from the commissioner of consumer protection for Connecticut.

Since then, Connecticut Attorney General Richard Blumenthal has confirmed that his office continues to seek information from Pre-Paid for a sweeping examination of the company.

"We are investigating all aspects of the company's operations, (including) its accounting practices and services," Blumenthal told TheStreet.com on Wednesday. "We're hoping to conclude this as soon as possible."

So far, Pre-Paid has largely escaped government probes. Pre-Paid has instead found itself fighting a slew of unhappy customers who have pursued the company on their own. And it has wound up battling a former federal prosecutor in the process.

After securing last month's big damage award in Mississippi, former U.S. Attorney Brad Pigott said that he simply used the company's own words against it. Pigott explained that he showed the jury a video with Pre-Paid's CEO misrepresenting the company's product and then proclaiming "three cheers for greed!" as he attempted to rally those who sell the policies.

Cohan, who has reviewed some of Pre-Paid's sales pitches, believes that justice is finally being served.

"Pre-Paid sows fear, uncertainty and doubt in the minds of society's weakest to get them to pay for a product of questionable value," Cohan says. But "with Mississippi's recent $9.9 million jury award, America's legal system is slowly catching up with this corporate bully."