ESA puts its foot down on deceptive alarm sales practices

New code of ethics targets deceptive door-to-door sales practices used by some alarm firms

You've undoubtedly heard the stories on your local news channels. A sleazy alarm systems sales person cajoles a homeowner into believing he is with their alarm company and has to do some sort of service or upgrade. He works his way into the house and "takes over" the security system - sometimes by swapping out equipment, and he then convinces the homeowner to sign a new contract. They often claim to be from "the alarm company" and before the homeowner knows it, this door-to-door sales person has put the homeowner in a compromised position; the homeowner is still legally under contract with their prior alarm company but has now signed a contract with a new company, even as their existing equipment has been yanked out and replaced, or at the very least reprogrammed.

It's been a regular problem in the industry for years, and it crops up regularly in media coverage, painting a bad image of the security industry. Just this past week, Pinnacle Security was in the news for settling a lawsuit in Illinois because the company was said to have conducted their business this way.

Now, the industry is starting to fight deceptive door-to-door alarm sales tactics. Today, at the ISC West 2010 trade show in Las Vegas, the Electronic Security Association (ESA) has announced a new code of ethics and standards of conduct specifically designed for alarm system companies. The code is designed to combat the problem of deceptive door-to-door alarm sales efforts.

To help stop the deceptive practices, the code of conduct requires, among other things:

  • Sales representatives carry ID cards and that they fully identify themselves and what company they are with
  • Sales introductions have to be specific in the nature of the business meeting
  • Proper licensing of all representatives and installers, and adherence to all laws, codes and ordinances of that jurisdiction
  • Door-to-door representatives must leave promptly upon request
  • No telephone marketing calls before 8 a.m. or after 9 p.m.
  • Adherence to FTC telemarketing guidelines
  • Alarm company representatives must get the express permission of the homeowner/business owner before removing a competing company's sign from the customer's yard
  • Representatives not to make financial claims about other alarm companies
  • Representatives not falsely claim to be with the homeowner's current alarm service provider
  • Marketing materials must be clear and explicit in what is being offered/done
  • Alarm companies must honor refunds and disclose termination agreements
  • Alarm company representatives to not quote statistics or provide other information that is known to be false or misleading (a common tactic of door-to-door alarm sales persons is to claim that the local police are seeing increased crime rates in the neighborhood and are advising residents to update their alarm system or install a system)

This is just a handful of the requirements and prohibitions introduced in the new code of ethics; the full document is available from the Electronic Security Association by request, and is in the document titled "ESA Code of Ethics and Standards of Conduct (amended Feb. 24, 2010)."

As part of the introduction of the code of ethics, the ESA had a public signing of its code of ethics by a number of companies in the industry. Some have been victims of the deceptive sales tactics, others were known for their deceptive sales tactics. The list of signatures on the code of ethics included ADT, APX Alarm, Broadview, Monitronics, Moon Security, the aforementioned Pinnacle Security, Protection One and Smoky Mountain Alarm Systems.

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