Despite much progress, the alarm industry is still fighting companies that use deceptive sales practices to con customers out of their existing contracts.
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It’s an image and stigma the professional security alarm industry has worked tirelessly to erase – that of the trunk slammer and ambulance chaser. Those of you who have been in the industry for any length of time know it hasn’t been easy to eradicate the reputation we formerly held as unscrupulous peddlers of security alarm systems. Today, the majority of the industry works together to foster and engage in sales practices designed to educate consumers on the advantages of professionally installed systems by licensed companies.
But don’t you believe for one minute that our job is done. There are still those companies, albeit only a handful, who feed off ‘ambulance chasing’ and stoop so low as to bait homeowners into switching companies in an effort to gain more alarm contracts and recurring monthly revenue (RMR). ADT calls them bad actors, and that’s being nice! The bottom line is that these sales tactics are not only unlawful, but zap RMR from professional, law-abiding companies in the industry.
The use of deceptive home security tactics recently reared its ugly head again, and ADT recently launched a new, reward-based campaign to stop security sales alarm scams. According to ADT General Counsel David Bleisch, the company has seen a resurgence in deceptive sales practices. “Year-over-year consumer complaints have increased dramatically,” he says. “We have to take drastic steps,” Bleisch says, adding that this type of activity is taking place at both new and established industry firms.
For ADT, drastic measures mean offering a $25,000 reward for proof of a company training its sales representatives to be deceitful. The evidence must be captured by video, and result in the successful prosecution of the offending company. Most often, according to Bleisch, victims end up having their ADT security systems unnecessarily replaced and are tricked into signing contracts with another provider. The unscrupulous companies often mislead and lie to customers - stating that their current company has gone out of business, or that they are there to upgrade the equipment. Sometimes they claim they are representing alarm panel manufacturers as well, he adds.
Bleisch and ADT call these antics bad acting, and it isn’t the first time the company has targeted this activity. Last year the company successfully brought lawsuits against several companies promoting deceitful sales practices.
Summer door knockers
Summer door knocker campaigns can also fall into this category, although the industry has rallied and established professional programs that don’t step over the lines of professionalism and truthfulness. “We don’t have a problem with door knocking or door-to-door campaigns as long as it’s done professionally. We aren’t concerned about fair competition,” Bleisch says.
The Electronic Security Association recently published a release outlining home security tips for summer sales, designed to help consumers spot home security scams and make informed decisions when purchasing an alarm system. For example, ESA suggests that consumers look for professional industry membership status and identification, and not be rushed into any changes or new systems without due diligence.
In 2010, ESA updated its Code of Ethics and Standards of Conduct to address deceptive sales practices. Last month, ESA extended this commitment by reexamining the code and again reaffirming its status, according to Laurie Knox, ESA’s vice president of public relations.
ADT’s Bleisch says the industry as a whole is aligned on the matter, and that it’s only a handful of companies trying to cheat and lie to consumers.
It’s probably a good idea to be on the lookout for these types of scams and have a conversation with your team. Urge your customers to contact you directly if a bad actor arrives on their doorstep asking them to switch providers or change services.