Comment
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In Alabama once your initial contract length has been met, you can cancel with a 30 day notice. (Much the same as apartment rentals without SIGNING a new lease.) When taking over an existing system, usually due to lack of service or expensive service, we will not bill until the 30 day requirement has been met. In fact, we will give a customer a period of up to 3 months free when moved to our company. Most contracts in Alabama are usually 3 year, but 5 year contracts are creeping into existence. We do not solicit takeovers, just respond to requests from the public. We have waited as much as a year to bring a customer on line waiting for their original contract to be completed. Also, it is my understanding that some contracts can not be sold to a new company and the new company upon takeover of a company's accounts might not have the protection of that company's contracts, so get new ones.
I don't know if any statute regarding this. AESBL the licensing arm of the
Alabama state government does not address the contracts. It is there to
protect the consumer, but in reality they are more interested in revenue.
The Alabama Alarm Association has fought them for years with very little
success. An example of their newest revenue idea, make every alarm
installing company take out an access license in addiction to the regular
license. Not all companies do access control so the association fought and
got that reduced to, if you do access control you must have a license for
access control and alarm work.
They, AESBL, recently brought all locksmiths under their umbrella with the
associated revenue being generated.
So basically, in my 39 years of alarm work, this seems to be the best
policy so as to not step on someone else's contract or right to revenue. If
ADT, Brinks, Monotronics etc can not service in a timely manner or charges
too much or some other reasonable problem, I think the customer should be
able to cut their ties to them at contract end.
Security By Elmore Inc
Birmingham, Alabama
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Response:
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I do not believe that Alabama has any statute that restricts automatic renewal provisions.
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Comment
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Ken,
You are right to assume that legislators considering legislation dealing with auto renewals statutes "should" understand that, while the alarm industry is not the only one to employ these renewal provisions, it may be one industry that needs to be exempted, as was the case in California. In Florida, we were able to hold off this type of legislation for three years until it finally passed. The new law is tolerable in it present form and depending on the company's contract will not even come into play for several years. I wonder if the other states, that have already passed this type of legislation, had the industry involvement and lobbying efforts to educate the legislators as to the potential dangers this has on the clients of the security, fire and medical alert industries. Of course getting new contracts is the best bet, if not only for the value of your company. However, this is not always possible or gets done in a timely manner, hence the importance of the auto renewal clause. Let us not forget that we are most likely not insured on an expired contract. Without even realizing it, the client may not be as well through their insurance company. I would suggest that the industry leaders go back to these states, continue to educate the legislators and seek exemptions for these industries. Bad legislation always seems to get revisited and this is one of those pieces of bad legislation. For the states that have yet to address this issue, start the education process now. The wave has started and will continue since it is a feel good topic with the public as well as being good for votes.
Bob Worthy
President
Secur Technologies, Inc.
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Question:
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I have another question on takeovers and being sued by last alarm company holding the contract with cust.
Can't we just have customer sign a separate form stating that:
* Customer has called voluntarily our company and/or
* Customer is no longer under contract and/or
* Customer is under contract but they still chose to get another security firm and take over the alarm and customer will deal with the consequences of canceling their 1st contract.
* That Customer was not solicited to specifically to break the contract by the alarm company, alarm co, was just prospecting and got a deal
* That customer was not forced to break any contract.
* etc etc
Ken to put this issue to rest, can't there be a form just like that or similar where customer signs of yes or no to each statement, so there are no doubts if or buts?
Thanks
HSS
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Answer:
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Not all alarm companies are willing to ask prospective subscribers for a written statement that effectively would provide a defense to a tortious interference of contract action. Similarly, not all alarm companies are willing to ask prospective subscribers for written indemnification if the prior alarm company sues. Additionally, some alarm companies are out there actively trying to take over subscriber accounts, willing to risk a lawsuit.
A form, as you suggest, would be useful but probably not determinative since a lawsuit could be brought anyway and when push came to shove the subscriber would probably testify that you presented a form that they signed without reading.
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