In what has become an annual summer tradition on par with outdoor barbecues, fireworks and baseball, the alarm industry has come together once again this year to raise awareness about deceptive sales practices. With the door-to-door sales season set to shift into high gear, the Better Business Bureau (BBB), in conjunction with Electronic Security Association (ESA), The Monitoring Association (TMA) and ADT, held a press conference in Baton Rouge, La., last week in the headquarters of the Louisiana State Fire Marshal to discuss how consumers have been impacted by these underhanded schemes and what authorities and reputable dealers are doing to combat the problem.
According to Carmen Million, President of the BBB Serving Southwest Louisiana, more than 700,000 consumers across North American turned to the BBB last year for information about home security companies. Disturbingly, Million says that of the 3,500 business categories tracked by the organization in 2017, home security sales ranked among the top 25 for the most number of complaints.
However, Merlin Guilbeau, Executive Director and CEO of ESA, points out that while the industry still ranks in the top 25 of BBB complaints, that still stands in stark contrast to about five years ago when the industry was among the top 10.
“While I don’t think it is just these press conferences that have reduced the number of complaints, I do believe with the help of the BBB and regulators combined with the efforts of TMA and ESA, we have been able to educate both consumers and industry players about the effects that those who mislead and misrepresent themselves have on the industry,” he says.
ADT in recent years has also seen a significant decline in the number of complaints it receives annually related to deceptive sales. In 2016, the company said it received nearly 3,400 complaints from customers who had been victimized by deceptive sales schemes, which was down about 20 percent from the year prior. Last year, ADT said it received about 2,600 complaints, marking another 20 percent-plus decline.
Though the stats may be falling, the fact that only a small percentage of those who have been duped actually come forward has spurred ADT and the industry as a whole to keep up the fight on this issue.
“Deceptive sales absolutely present an unfair negative perception of our industry,” TMA CEO and Executive Director Jay Hauhn says. “If you do 50 things right and one thing wrong it is that one thing that gets all of the attention. When someone is victimized by this, the local television station has their consumer reporter talk about it and someone sitting there and watching this sees that as the industry and not necessarily as the nefarious practices of a couple of companies.”
Commonly Used Deceptive Tactics
As in years past, one of the most common methods that unscrupulous sales reps still use to trick consumers into switching security providers is to lie about the company they represent. For example, they may tell a homeowner they are with or affiliated with certain company and that they have been authorized to upgrade their current system when in reality they are with a rival firm and are attempting to dupe them into signing a new contact.
Such was the case for Dale Meredith, a resident of Cottonport, La., who spoke during last week’s press conference. Meredith described an encounter he and his wife had with a deceptive salesman last summer in which the rep attempted to get him to switch security providers by telling him he was a company “authorized” to offer him an upgrade of his ADT system. Fortunately, Meredith was able to see through the fast-talking huckster’s scheme and asked him to leave but many others are not so lucky.
“Once they play that smoke and mirrors game and make (the consumer) think they are a legitimate company, they go down a road to start to do repairs and get them to sign some kind of contract that they will then be financially responsible for,” Louisiana State Fire Marshal Chief H. “Butch” explains. “The tactic is to deceive, lie and make yourself into something you’re not and all along you are preying on this person’s inner fears of safety, security and, at the end of the day, trying to get money out of them.”
Because many states give consumers a three-day period in which to cancel a contract, Million says the schemers will almost immediately begin working to install these systems in hopes that they won’t decide to back out of them. “The consumer then feels obligated and, in some cases, doesn’t want to be responsible for the merchandise, so they feel like they are stuck,” she adds.
Addressing the Problem
Browning says that it is incumbent upon everyone involved – alarm dealers, industry associations and regulators – to work together to develop the proper laws and partnerships to ensure that all consumers, especially the elderly, are not taken advantage of by con artists.
“We have to work in the states – that’s really where it has to start – to have the right regulations and the right partnerships between the associations and the actual companies to create a united front, not only to demand professionalism and best practices be used but also show there is a consequence if someone goes rogue,” Browning adds. “Unfortunately, most companies operate excellently and they do a good job, but from time-to-time they have an employee that doesn’t follow the rules. Companies doing their own self-compliance and finding those employees before they get out of hand is important too.”
Despite the negative connotation that a complaint lodged with the BBB may have on its surface, Million says they really see it as more of an opportunity for a company to fix problems within their business and improve moving forward rather than just simply as blight on their reputation.
“If we can alert a company to a problem that’s going on, then they can take action. That’s a relationship the Better Business Bureau has with businesses and so we want to let them know that there are issues within their company and these are good companies, but we want them to know about it so they can address it,” she says. “It only becomes a problem if they don’t address it.”
Some companies have also begun to aggressively go after companies for financial damages they have incurred as a result of deceptive sales. Earlier this year, ADT announced that it had reached a $10 million settlement in a lawsuit it had previously filed against Vivint over its alleged use of misleading sales tactics. The settlement was the largest to date for ADT in its continuing fight to crackdown on deceptive sales across the industry. Last year, ADT also reached settlements in a deceptive sales lawsuit against Alder and its owner, Adam Schantz, as well as in a lawsuit filed against two Monitronics dealers in Texas.
“The industry has built its reputation on trust with the consumer and, honestly, if you can’t trust your security provider then who can you trust? Anytime you erode that trust through bad apples or misrepresentation, lying or deceiving people, it absolutely has a negative impact on it,” Guilbeau concludes.
About the Author:
Joel Griffin is the Editor-in-Chief of SecurityInfoWatch.com and a veteran security journalist. You can reach him at [email protected].
