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

Although the code of ethics generated a photo-opportunity of support from the alarm industry, the challenge for the code of ethics is likely to be enforcement. The code is voluntary and provides only for self-enforcement according to ESA Executive Director Merlin Guilbeau, who noted that the association is limited in how it can enforce the code of ethics. Despite the limited ability to enforce the code (the code of ethics only requires the offending company do a prompt investigation of the alleged complaint and respond to the complaint internally), Guilbeau said that the association can turn to outside assistance to apply industry peer pressure and even negative media coverage to the offending company if necessary. Unfortunately, Guilbeau said that some instances of deceptive door-to-door alarm sales come from companies outside of the ESA's membership, and when the actions come from outside of the association's membership, the ESA is a weak position to enforce its policies against deceptive alarm sales practices.

Some companies already had internal prohibitions against such practices. ADT Security Services' Jay Hauhn said his employer already has had internal policies in place that prohibited deceptive sales practices. ADT attorney David Bleisch noted that ADT has been a victim of such practices and has recently filed suit against two companies involved in such practices. He said that ADT already makes sure their representatives have photo IDs available and use ADT badges to clearly indicate their commercial affiliation. Bleisch noted the company already has a developed internal training program to make sure such practices don't crop up in their sales teams.

The ESA's Merlin Guilbeau said the revised code of ethics (an earlier code has been in place already) has been an issue that the association has been working on for a year and a half. Asked about the conspicuous signatures of a couple known offenders in deceptive practices, Guilbeau said the change from the companies was coming from within. "These companies have reached out to the ESA; they know they needed to make changes."

Mike Miller of Moon Security signed the code of ethics and noted that his alarm company has been victimized by competitors who employed such practices. Sometimes, he said, those deceptive competitors can be dissuaded of their actions by strongly written letters, threats of lawsuits or even lawsuits. Miller, who serves as the president of the ESA, said that it was time that the industry took a strong stand against those practices.

"The overall number of complaints is small, but the impact to the industry is big," Miller said. "This is a black eye to the security industry."

According to most involved in the code of ethics who I spoke with at the press conference, the issue of deceptive alarm sales practices is often more of an issue with "bad apples" in the sales staff than any sort of orchestrated sales efforts. According to Guilbeau, the offending companies can likely avoid such practices by 1) adopting the code of ethics and 2) fully training their sales staff in terms of what is acceptable and what is not.

While ESA President Miller and Executive Director Guilbeau championed the code of ethics, they noted that the code certainly doesn't prohibit door-to-door alarm sales. Guilbeau said that door-to-door sales are a proven marketing effort, and that done correctly (i.e., done by following the ESA code of ethics) door-to-door efforts can be a valuable part of any alarm company's sales and marketing process.