Missing Ethics in Door-to-Door Alarm Sales?

All is not well in the world of residential alarm sales. SecurityInfoWatch.com has been tracking stories coming out of Arizona, Tennessee, Nevada and the state of Washington, where alarm competition has created mischievous sales techniques. Repeatedly at the center of the stories is a company named APX Alarm, which is an alarm company based out of Provo, Utah, and which the Better Business Bureau reports is doing business as Apex Alarm, Apex Monitoring, Apex Security and Apx Alarm Security Solutions.

The company has been the subject of a number of news reports for suspect sales techniques from Nevada to Memphis. Consumer news reports from various city media outlets such as Carson City, Nevada, and Memphis, Tenn., allege that the company has used dogged techniques like sending out employees who have been "pushy" and not properly identified themselves as to which alarm company they are with.

Jack Inbar, vice president of operations for APX, says his sales staff are "certainly assertive," however, he says that the media accounts are likely untrue and "distorted". According to Inbar, his company's employees receive seven months of training and wear APX shirts and always carry APX identifications and brochures. "Our employees are door to door. But they are very well trained and very well disciplined," said Inbar, who noted that those employees who don't follow company policy are reprimanded and/or let go.

Nonetheless, a report from WMC-TV Channel 5 in Memphis, Tenn., recorded the case of one Memphis neighborhood that had been canvassed by APX's door-to-door sales staff. The story reported the instance of Linda Husted, who had been approached by an APX employee. "He didn't give me any ID," Husted told WMC-TV 5. "He said he didn't have any brochures that I could look at." Husted added that the sales staff came back three times, not accepting her "not interested" as a final answer.

Asked about the incident, and why an alarm sales person would be out on the streets approaching homeowners without business cards or brochures in the evening hours, Inbar said that he didn't know the specifics but that the salesperson "could have just been out of brochures."

Misrepresentation at the Door

In Seattle, local news broadcaster KOMO News reported in July that the wave of door-to-door sales had hit Brink's Home Security, with some residents even claiming that tricks have been used such that sales agents are representing themselves as companies other than they are with in the hopes of stealing customers from companies like Brink's.

According to Dave Simon, the senior manager of industry and public relations for Brink's Home Security, they've heard from around 50 customers who have been hit by misrepresentation. Simon said the usual methodology is that the competitor will scour neighborhoods for signs from other alarm companies and then will knock on the doors of those customers under the auspices of upgrading their alarm systems. Then, says Simon, they'll try to change their monitoring contract.

HSM's Stern reported seeing similar instances where a door-to-door competitor has told the homeowner that he or shee needed to change out the panel and to add a back-up communicator. He said that the equipment changes weren't because of a malfunction, but were simply a way to recruit accounts away from their existing service and monitoring contracts.

Brink's has responded, says Simon, with messages to its customers advising them of such scams and to be aware of such ploys and to always ask for identification from sales persons. Brink's, like most national alarm companies, requires its employees to carry proper credentials identifying them, and many of the top national companies which have fallen prey to these scams say they do not use the door-to-door techniques themselves.

Similar tactics have hit HSM customers, reports Dennis Stern, HSM's executive vice president and general counsel. "There are a bunch of guys that sell this way. There are companies that don't correctly represent who they are and what they're doing," says Stern, who notes that APX is by no means the only company whose door-to-door sales tactics could tarnish the alarm industry's image. Stern says that he has heard from others at Guardian Protection, Protection One, ADT who say they also have been hit by similar sales tactics.

"They're knocking on doors, and misleading to people that they're from Brink's," explains Brink's Dave Simon. "Then they're getting in the door and recommending changes to alarm systems that really don't need to be made and then trying to switch the monitoring over to them."

According to Simon, the tactics don't fall in line with what Brink's has for standards.

"We don't go door-to-door, and we don't come in with a service technician to say you need to have work done. If a technician needs to be there, then either the customer has contacted us or we've contacted them and set up an appointment."

Simon added that while the events have been isolated, they seem to flare up in the summer (Inbar says APX does have a summer program that uses college students). At Brink's says Simon, the issue of mispresentation has come to a point where the company has contacted APX Alarm and requested they cease the business practices.

APX's Inbar, however, denies that his company's sales staff misrepresents itself. "We even make sure that our customers know that while we are a dealer of Honeywell equipment, we are not part of the Honeywell corporation," says Inbar.

Being Proactive

Simon says that any alarm companies experiencing unethical operations in their markets will need to be proactive. He offered the following tips that his company has been doing as suggestions for any alarm company being plagued by a competitor that is misrepresenting itself.

"Make sure that their people, when they perform any type of service visit, identify themselves," says Simon. "They need to call before hand and say what dealership they're from and let the customers know there are changes that have to be made and why. They should give them the technicians name and specify a time they would be out there to service the equipment. You have to be very clear about who you are and why you are coming out.

"It's best to get your customers informed in every way you can, and notices in a letter or bill is a good way to do that. The other way we do that is through an automated voicemail system that can call our customers and advise them of the situation. Email will also work well if you've collected your customers' email addresses."

An Industry Ethics Problem

But even with proactive efforts from the "stand-up" companies in the industry, the alarm industry may not be immune to ethical problems.

"It's an entrepreneurial environment, where if you want to start an alarm company tomorrow, you can do it, and how you operate that company would be based on your personal ethics," says Simon. "The challenge there is the demarcation between the different companies. You have some companies with firmly established standards, but not everybody adopts those kinds of high standards.

So how do you reach those high standards?

"It can be education. It can be peer pressure. It can be pressure from association leadership and from national leadership, and ultimately it would be good to create some sort of enforcement mechanism. Overall, for the alarm industry, enforcement of any type of regulation or standard seems to be very difficult."

Nonetheless, APX's Inbar maintains that problems of ethics and standards don't affect his company. He says APX is one of few companies that makes it clear to customers what is being done, and actually follows up with their customers in two surveys, before and after the actual equipment install to make sure everything is upfront.

But asked how it is that a company that has such seemingly standard ethics has become the black sheep of the alarm industry according to both their competitors and according to so many local community news outlets, Inbar said it was only because the company was big and steadily growing.

"We're a lot larger than a lot of them," said APX's Inbar, "and as a result, we're on the radar."