Understanding Your Alarm Contract

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You might think the primary purpose of your alarm company’s contract (aka “Subscriber Monitoring Agreement”) is to hold you to a payment schedule for a prescribed period – but that’s just part of it. Lots of services with a monthly fee require a contract: cell phones and cable are good examples. However, your home security subscriber agreement deserves a closer look, because there’s a lot more to it. Not all alarm companies take the same approach, so I’ve compiled a short list of the issues that you should research in advance. But first, here’s a link to a story of an alarm customer who was snared by a contract detail.

Adams is the first to admit that he should have read over that contract more thoroughly before signing on with another company. But, what he says really pushed his buttons is the way the company responded to his request for cancellation.  “They told me if I didn’t pay it within 10 days they would send it to a collection agency, very inappropriate,” said Adams. “People need to really read their contract thoroughly and understand how the renewal process is going to occur and maybe they can avoid these extra fees,” he said.

In this case, the subscriber changed alarm companies, not realizing that after the initial term, his contract automatically renewed for subsequent three-year terms. While most alarm contracts renew for one year or month-to-month (regardless of initial term length), some do not – and you should know that up front. While a standard alarm monitoring contract may have as many as thirty separate clauses, here is my list of the important ones for you to consider.

  • Initial term and renewal. Most companies require at least a three-year initial term, and some ask for five years – but a handful can be more flexible. The price you pay for equipment may be related to the length of your commitment: longer initial term should mean bigger upfront discount. Renewal should never be longer than annual or month-to-month – and there are at least five states that require month-to-month renewals, unless you agree in writing, in advance, to a longer renewal term.
  • Exculpatory language. This is standard language that says, among other things, that the alarm company is not an insurer. I have never seen a subscriber monitoring agreement without this clause – and I have seen hundreds of different monitoring agreements.
  • Limitation of Liability. This clause sets a cap, usually $500, on the amount that the alarm company will pay in the event of an actual loss. Since the alarm company is not an insurer, subscribers requiring more coverage should review their insurance coverage, and increase it when necessary.
  • Ownership of equipment. Many alarm companies “lease” the equipment to you, so that even after you meet your contractual requirements, the equipment is still not yours. The best companies make the equipment yours up front, so that you can easily change companies later. Also, choose a company who sells quality equipment with a brand name, like GE, and avoid companies who sell their own “proprietary” equipment, since you are stuck with them forever.
  • Risk-free trial period. Most alarm agreements contain only the standard three-day Right of Rescission language required by the FTC (Federal Trade Commission) for in-home sales. You should have a full 30 days to make sure you are satisfied, or you get a 100% refund. As for that in writing.

We worked very hard to make the FrontPoint monitoring agreement as balanced and easy to understand as possible: one example is our options for initial agreement term of one, two, or three years. Even so, we still get questions, and are happy to answer each and every one. On-line shoppers quickly learn why we are the nationwide leader in interactive, wireless home security: the long list of five-star reviews spells it out pretty clearly. Being on top means we have to prove ourselves in every aspect of our business – even the “boring” things like contract language. It all matters, and we invite you to experience what sets us apart. We promise to “wow” you!

 

Comments (13)

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  1. Rich DuBois

    I have just cancelled your service contract after 3 years (not for any reason negative to you). I would like to still be able to set the alarm when we are in the house but you have apparently disabled the entire system. Any way I can use my system without the monitoring service. thanks.

    • Valerie Saponara

      Rich, once you cancel your contract with us you still own your system and equipment. It will only work locally, meaning , it will only function from the main control panel and sound out loud. The smartphone app and interactive features get canceled along with your contract. Please let me know if you need more clarification on this!

  2. Steven

    Just ordered today…and THEN read the contract. Couple of concerns – if I read it correctly it states that, there will be an auto renewal after the 3 year commitment. Fair enough. But if I want to cancel after the 3 year period, if I’m reading it correctly, the contract says it must be done 2 MONTHS before contract expires, and sent to Frontpoint in a certified letter with return receipt. Am I reading this correctly? If so, it is the most onerous contract I have ever seen. It should be as easy to cancel as to buy. Should be able to be done online or with a simple phone call.

    After reading the website and reviews so carefully we were very excited about ordering – but this single detail is making us reconsider.

    • Peter M. Rogers

      Steven – the language you refer to is actually very standard in the alarm industry. When we were putting together our agreement, we took what what we thought was the best of the various elements to construct our own more consumer-friendly version. In some cases we adopted standard industry practice, and the part you are referring to is a good example of that. The auto-renewal is there so that we can continue to provide uninterrupted service at the end of the contract, which makes sense. Of course, if you want to cancel, we don’t give you a hard time (like some alarm companies) – but we do like to know in advance. As far as the methods of informing us, you may want to check with our Support team and get from them the acceptable means of notification – again, we don’t want to make it hard for you to leave us if that is your wish. As you will find when you read reviews about what we are like to deal with, it’s usually a pleasant surprise, especially when compared with other alarm companies. Thanks again.

      • Steven

        Thanks for your reply, Peter. I am looking forward to receiving the equipment and setting things up. The website is excellent and chock full of helpful information, and everything I have read was so positive, so this language struck me as quite an anomaly and did create questions. As you say…understand your contract. Certified letter – 2 months out – yikes – maybe you could consider changing that language since you don’t mean really mean to make it that hard for a customer to cancel.

        I have now spoken to my rep who made notes to make it very easy to cancel after the commitment period, and I do appreciate that.

        Looking forward to a long-term relationship. From what I hear and read everything sounds quite positive. And I appreciate the transparency of this blog and all the comments as well. My ordering and subsequent questions have been nothing but positive with Mo, who has greatly helped make it a positive process.

        Steven

        • Peter M. Rogers

          Steven – My pleasure. We’ve fund over the years that transparency is one of our most highly valued attributes – that, along with taking a highly consultative approach to the sales process. There is enough pressure out there from the door knockers and the “You gotta buy it today!” call centers in this industry. We are in the process of revising the monitoring agreement, and will take your suggestion to heart (it’s been on my list to address for some time).

          Please let us know if anything comes up in your setup and activation process that you think could be better. We’re constantly making improvements to our various processes, and a high percentage of the best ideas do come from the customers like you who are willing to share their experiences. After all, if you’re happy, we’re happy. Thanks again, and we look forward to providing you with peace of mind for years to come.

  3. Steven

    Just ordered today…and THEN read the contract. Couple of concerns – if I read it correctly it states that, there will be an auto renewal after the 3 year commitment. Fair enough. But if I want to cancel after the 3 year period, if I’m reading it correctly, the contract says it must be done 2 MONTHS before contract expires, and sent to Frontpoint in a certified letter with return receipt. Am I reading this correctly? If so, it is the most onerous contract I have ever seen. It should be as easy to cancel as to buy. Should be able to be done online or with a simple phone call.

    After reading the website and reviews so carefully we were very excited about ordering – but this single detail is making us reconsider.

    • Peter M. Rogers

      Steven – the language you refer to is actually very standard in the alarm industry. When we were putting together our agreement, we took what what we thought was the best of the various elements to construct our own more consumer-friendly version. In some cases we adopted standard industry practice, and the part you are referring to is a good example of that. The auto-renewal is there so that we can continue to provide uninterrupted service at the end of the contract, which makes sense. Of course, if you want to cancel, we don’t give you a hard time (like some alarm companies) – but we do like to know in advance. As far as the methods of informing us, you may want to check with our Support team and get from them the acceptable means of notification – again, we don’t want to make it hard for you to leave us if that is your wish. As you will find when you read reviews about what we are like to deal with, it’s usually a pleasant surprise, especially when compared with other alarm companies. Thanks again.

      • Steven

        Thanks for your reply, Peter. I am looking forward to receiving the equipment and setting things up. The website is excellent and chock full of helpful information, and everything I have read was so positive, so this language struck me as quite an anomaly and did create questions. As you say…understand your contract. Certified letter – 2 months out – yikes – maybe you could consider changing that language since you don’t mean really mean to make it that hard for a customer to cancel.

        I have now spoken to my rep who made notes to make it very easy to cancel after the commitment period, and I do appreciate that.

        Looking forward to a long-term relationship. From what I hear and read everything sounds quite positive. And I appreciate the transparency of this blog and all the comments as well. My ordering and subsequent questions have been nothing but positive with Mo, who has greatly helped make it a positive process.

        Steven

        • Peter M. Rogers

          Steven – My pleasure. We’ve fund over the years that transparency is one of our most highly valued attributes – that, along with taking a highly consultative approach to the sales process. There is enough pressure out there from the door knockers and the “You gotta buy it today!” call centers in this industry. We are in the process of revising the monitoring agreement, and will take your suggestion to heart (it’s been on my list to address for some time).

          Please let us know if anything comes up in your setup and activation process that you think could be better. We’re constantly making improvements to our various processes, and a high percentage of the best ideas do come from the customers like you who are willing to share their experiences. After all, if you’re happy, we’re happy. Thanks again, and we look forward to providing you with peace of mind for years to come.

  4. Alan

    Very interesting post.

    And I agree, you guys are very balanced, even in your contracts, especially compared to most of your competitors, and ALL of the big ones.

    You guys set the bar!

  5. Alan

    Very interesting post.

    And I agree, you guys are very balanced, even in your contracts, especially compared to most of your competitors, and ALL of the big ones.

    You guys set the bar!

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