The alarm industry has made significant strides in recent years in not only raising consumer awareness about some of the deceptive sales tactics used by nefarious door-to-door salesmen, but also in finding and punishing those companies who refuse to change their ways. For example, in 2014, ADT began offering rewards of up to $25,000 to those persons who could provide evidence of companies training their sales reps to be intentionally deceitful with customers. Just a year prior, ADT obtained a permanent injunction and received damages from two companies who they claimed misled ADT customers to believe that they were affiliated with them and that their alarm systems required upgrading. However, despite efforts like this from ADT and other reputable alarm firms, the fact is that many dishonest alarm companies continue to prey upon consumers.
In anticipation of yet another busy door-to-door selling season this summer, the Better Business Bureau, in partnership with the Electronic Security Association and Central Station Alarm Association, held a joint press conference in Salt Lake City, Utah, this week to once again raise awareness of the issue. This year could be particularly ripe for scams following the sale of ADT earlier this year to an affiliate of private equity firm Apollo Global Management, LLC. One of the favorite schemes used by fraudsters is to tell homeowners that their alarm service provider has gone out of business and that they need to upgrade their equipment and sign a new contract. Of course, that’s just one of the numerous misleading, high-pressure tactics some door-to-door alarm sales reps employ.
Of the 3,400 business categories the BBB tracked in 2015, home security sales ranked in the top 25, for the most number of complaints, according to Jane Driggs, president and CEO of BBB Utah. Given that 5,000 complaints were filed against home security companies last year alone, Driggs said it not only shows them that many homeowners are not doing an adequate amount of research, but that there are some genuine “bad apples” in the industry. Because many of these rogue firms are headquartered in Utah, Driggs said that BBB Utah handles the majority of complaints from across the country. Nationwide, nearly 160 home security companies have a C rating or below with the BBB.
“I think it is terrible that some businesses operate this way and train their sales reps to lie, cheat, and swindle consumers like me,” said John Miekle, 79, of Cottonwood Heights, Utah, who recognized the con of a sales person who showed up on his doorstep last December.
Jay Hauhn, executive director of the CSAA, said stories like Miekle’s of sales reps who try to take advantage of the disadvantaged and the elderly make him especially angry. “A part of what we provide our customers can be summed up in one word – trust. It concerns me greatly when I hear stories of how unsuspecting consumers are being conned by a few in our industry who are, frankly, not trustworthy,” said Hauhn. “This predatory business model is practiced by just a few bad companies. We have thousands of alarm companies that sell appropriately. Unfortunately, it only takes a few poor performers to hurt the reputation of the entire industry.”
Merlin Guilbeau, executive director of the ESA, said the organization takes its role as a leader in the fight against deceptive sales seriously, having revised their code of ethics and standards of conduct six years ago to specifically address the need of members to be honest and trustworthy. Among these new standards was a requirement that sales reps carry ID cards and be properly licensed within the areas in which they operate. “It our expectation that ESA members will take this code seriously and continue to make it part of their company’s culture,” said Guilbeau.
However, according to Guilbeau, the overwhelming majority of complaints against home security companies are lodged against non-member firms. While ESA has been actively involved in trying to put a dent in deceptive sales practices for years, Guilbeau said the success of those efforts is hard to put an exact figure but he does believe the message has begun to resonate with many consumers. “It’s like any other PR campaign, it takes time and it takes consistency,” he said.
And though it may be off-putting to many consumers, Guilbeau said that not all door-to-door sales efforts are inappropriate and have, in fact, been a very effective tool for companies in a wide range of industries for decades. He cautioned though that it needs to be practiced in the right way with honesty and integrity.
Complaints against home security companies have gone down somewhat recently – dropping to second on the BBB Utah’s list of the most complained about firms in 2015 after holding the top spot for six years – but Driggs said they really want the industry to step up to the plate this year and start to put a greater dent in it. “We continually meet with businesses to discuss what their complaints are about and how they can improve but it is all about self-regulation. They have to want the change and they have to want to make their sales people do the right thing,” she said. “You can’t force them.”
One way Guilbeau believes they can accomplish this is by having companies implement better sales training programs. “It’s hard to think that in today’s society we have to train some of these young people on ethics but sometimes that’s necessary,” he said. “It really starts there. If you train properly and you give them good guidance and parameters and they stay within those boundaries, then the results will be honesty, integrity and doing good work. If you let them run amok and greed and money factor in, the wheels kind of fall off.”
Homeowners also have an important role to play in dissuading firms from engaging in unscrupulous sales tactics. Driggs urges consumers to be more diligent when they are approached by a home security sales rep and to verify their identity prior to engaging them in conversation. She also said people need to do their homework on companies and thoroughly read contracts before signing them.
The BBB has shared tips for consumers who are considering a home security system (bbb.org/homesecurity), and also released advice to potential employees who are being recruited to spend their summers knocking on doors (bbb.org/alarmsales). “We urge those who are selling security systems to abide by the BBB Standards for Trust,” said Driggs. “Tell the truth, honor promises, and embody integrity.”
