The alarm industry is still up in arms over the “door knockers” – the seasonal sales companies that recruit and deploy hordes of young people, usually in the summer, to market home alarm systems and earn high commissions in neighborhoods all across America. These companies sell about 300,000 systems every summer, which is just as many systems as ADT sells to homeowners in a year through its own branch offices: make no mistake, this is big business. But there is a dark side (and I’ve posted on these potentially pushy folks before) – there are lots of complaints. The combination of high pressure sales tactics and little time to reconsider the purchase prior to installation has resulted in fines and lawsuits against these companies all across the US. Some companies are worse than others, of course. And now one the largest companies is the subject of a legal action in a very populous state.
The Ohio Attorney General filed a lawsuit against a home security company. Richard Cordray accuses Utah-based Pinnacle Security of violating Ohio’s Consumer Sales Practices Act. The lawsuit includes charges that Pinnacle used false and misleading representations, unfair and deceptive sales practices, and failed to honor notice of cancellation.
There is an interesting wrinkle in this story. Richard Cordray is no longer the Attorney General of Ohio: he has been chosen as the incoming chief of the United States Consumer Financial Protection Bureau (or “CFPB”), which officially launches in July of 2011. The CFPB will hold primary responsibility for enforcing the federal laws and regulating consumer protection in the United States. Personally, if I were a nationwide alarm company selling door-to-door, this is not the person I would choose to alienate to the point where he filed suit against me.
Details on the Lawsuit
Cordray says he received more than 50 complaints about the company. “Through door-to-door sales, this company encouraged consumers to sign contracts and then installed home security systems on the spot,” said Cordray. “Pinnacle often refused to allow consumers to cancel and continued to bill them for the systems that they did not want. Through today’s lawsuit we are asking the court to issue a permanent injunction to end these sales practices and to order Pinnacle to pay restitution to Ohio consumers.”
Some Actual Complaints
According to a consumer from Cleveland, Pinnacle installed a system that did not work and then charged a fee for early termination of a contract. The termination fees in most cases amount to more than 100% of the contract price. Another consumer, from Cincinnati, filed a complaint after Pinnacle allegedly sold a security system to her elderly mother who is impaired and then refused to allow the woman to cancel without paying additional fees.
Sadly for Pinnacle, the Ohio suit follows hard on the heels of a suit filed by ADT, also related to deceptive sales practices. The ADT suit is also covered in a prior post – and Pinnacle has been sued before by both ADT and Monitronics (another nationwide alarm company) for “poaching” existing alarm customers.
What You Should Do
Here’s what you should do when an alarm system salesman knocks on your door:
- Always ask for company ID – know who it is that’s trying to sell you something
- Ask about company alarm licensing, and individual licensing – many of these sale people are not licensed, or their companies aren’t
- Ask about safer cellular monitoring and smarter interactive services – and what they really cost – since you want the best services, and because these companies generally charge a premium price for equipment and monthly fees
- Tell the salesperson you want time to think about it – if you are forced to buy on the spot, it’s probably not an offer that will stand up to scrutiny and research
- Do your due diligence – checking online reviews (and sites like BBB) can really pay off
FrontPoint has never sold door-to-door – and we don’t plan to sell that way in the future. The best home security customers are the people who are looking for a system in the first place, and with home security expanding to including to include remote video, interactive features, and even control of light, locks, and thermostats, it’s no wonder that demand is increasing. Our systems are safer, smarter, simpler, more affordable, and virtually impossible to defeat. That’s what makes FrontPoint the #1 ranked alarm company in the US and Canada for interactive, wireless home alarm systems. And it also explains why we have the highest customer retention in the alarm industry. Just read the reviews – you’ll see why!