Soldiers' And Sailors' Civil Relief Act And Your Subscribers 

December 15, 2012

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Question
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Ken,
       We recently received notice from a servicemember who was being deployed overseas for longer than 90 days.  She has requested the termination of her agreement with our company and cites the 50 U.S.C. APP 535 of the Servicemembers Civil Relief Act of 2003.  I have read parts of that act and I think it is a great protection for those who so faithfully defend our freedoms.  What has our industry done that could be considered “Industry Standard” for customers in these situations? 
Regards,
Sterling
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Answer
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      Soldiers' and Sailors' Civil Relief Act (SSCRA) to provide protection to those called to those in the armed forces. Enacted in 1940, the SSCRA was updated after the Gulf War in 1991 but was still largely unchanged as of 2003.
      Servicemembers Civil Relief Act (SCRA) was signed into law December 19, 2003, not only protects those on active duty; it also affords protection for Reservists and members of the National Guard (when activated under Title 10, United States Code).  The current law is found at 50 U.S.C. App. § 501 et seq. Courts have generally construed the SSCRA liberally to protect those in uniform, and the same should be true with the SCRA
      The SCRA was written to clarify the language of the SSCRA, to incorporate decades of court interpretation of the SSCRA and to update the SSCRA to reflect new developments in American life since 1940. The SCRA, signed into law December 19, 2003, not only protects those on active duty; it also affords protection for Reservists and members of the National Guard (when activated under Title 10, United States Code).
     The most significant way this law applies to the alarm industry is that lawsuits cannot be commenced or prosecuted against servicemen on active duty.  Only leases can be terminated by servicemen, not service or monitoring contracts.  However, if there is a breach a lawsuit cannot be brought while the subscriber is on active duty.
       There is no industry wide policy that I am aware of, so let's see if we can encourage one.  Those called into active duty who cannot meet their financial obligations under the alarm contracts should be permitted to terminate, without penalty.  That of course permits the alarm company to discontinue service.
       How does this affect the "free alarm" deals where the alarm company installs a free alarm on condition that the subscriber complete a 5 (usually) year monitoring contract?  If a court were to determine that this arrangement was really an installment sale contract the serviceman would be permitted to terminate.
       The law applies to time payments or installment contracts.  Military members who signed an installment contract for the purchase of personal property before active duty will be protected if their ability to make the payments is materially affected because of their active duty service.  The member must have paid, before entry into active duty, a deposit or installment payment under the contract.  If the member is not able to make payments because of his or her military duty, the SCRA applies.
       The vendor is thereafter prohibited from exercising any right or option under the contract, such as to rescind or terminate the contract or to repossess the property, unless authorized by a court order.
      The court may determine whether a member's financial condition is "materially affected" by comparing the
member's financial condition before entry on active duty with his financial condition while on active duty.
        This could be interpreted to prohibit termination of monitoring service during active duty.  It would be interesting to know how ADT handles this situation.  Maybe ADT will let us know.
 In summary, I think the better practice for the alarm industry is to allow the active serviceman to terminate without penalty which will permit the alarm company to terminate services, but the subscriber retains the installed alarm system.
         The alarm contracts don't have to provide for this contingency since it's statutory.