ADT is no stranger to class action lawsuits, but generally large companies with deep pockets hope to avoid class actions. Even if without merit class actions are costly to defend and time consuming. On November 9, 2014 ADT was sued in Federal Court in Illinois for deceptive business practices in connection with its wireless security equipment and monitoring services. According to the lawsuit, while ADT advertises that it uses the most innovative and advanced technology its' wireless signals are unencrypted and unauthenticated, thus easily intercepted by third parties. The complaint alleges:
"In its marketing materials, including on its website, ADT represents, inter alia,
that it “has one of the most trusted and well-known brands in the security industry today.”
Additionally, ADT’s marketing materials are intentionally designed to give potential customers the overall impression that its home security equipment and services are secure and reliable."
"... all of ADT’s marketing materials promote the safety, security, and peace of mind that ADT’s systems will provide to its customers."
"ADT’s misleading marketing statements and omissions are particularly egregious in light of the fact that they provide a false sense of security to those individuals and businesses that are most vulnerable: individuals and businesses who are seeking the comfort of an extra level of security that a home security system provides."
"ADT describes its home security products and services as “Prevention and
protection solutions for your home, family and peace of mind.”
“Smart home systems help you stay connected and protected with easy-to-use features that give you peace of mind – practically anywhere, any time.”
"ADT makes the following representations on its website:
a. Customers can “Get Security You Can Count On. Every Day of the Year”;
b. “Your haven is armed with 24-hour-a-day protection, 365 days a year”;
c. Customers can “Live worry-free with ADT Security for less than $1 a Day”; and
d. “Fast. Reliable. Security Protection. ADT stays constantly alert with six Customer Monitoring Centers operating day and night across the country. Our Customer Monitoring Centers are nationally connected, equipped with secure communication links and backed by the latest technology so that our security
team is always ready to act the moment an incident occurs.”
"“When you want to do everything you can to safeguard your loved ones, your
home and your treasured possessions, you owe it to yourself and your family
to talk to us about our continuous 24/7 protection”;
“When it comes to you and your family’s safety, we let nothing stand in the
way of our professionally trained team immediately working to help ensure
“Only home security monitoring provides you and your family with the
reassurance that even when no one’s home, you’re protected against unwanted
entry and property loss”;
The complaint goes on to allege why the representations constitute deceptive business practices:
" Despite its representations in its marketing materials, ADT’s wireless systems are unencrypted and unauthenticated, and otherwise insecure. Therefore, ADT’s wireless systems are easily accessed and manipulated—or “hacked”—by unauthorized third parties.
By hacking ADT’s wireless systems, unauthorized third parties can, inter alia,
remotely disconnect or turn off the security systems so that customers are unknowingly left unprotected by their systems.
Unauthorized third parties can also hack into ADT’s wireless systems and use
customers’ own security cameras to unknowingly spy on them. "
Actually I am surprised that the lawsuit limits itself to the unencrypted or insufficiently secure wireless equipment. How about a false sense of security. Surely ADT does not offer "prevention" and throwing around the word "protection" starts to sound an awful lot like "prevention", especially in the context of the advertisements and promotions. Of course all of this is negated by ADT's contract.
So there are a few lessons to be learned. Though ADT may prevail in the lawsuit, most of you reading this article would be financially hard pressed to defend yourself. Of course a smaller company is less likely to be the target of a class action unless brought by a governmental agency. But not to worry. Here are few things you can do today.
- make sure your website and advertisements do not cross the line from puffery to false expectations
- make sure your subscriber contract form is lawful and properly executed
- make sure your subscriber contract is properly worded
- use the Disclaimer Notice
- Make sure your contract contains a class action waiver that should get you out of the class action [yes, the Standard Form Agreements have that provision - get the All in One forms - and then you'll have both "prevention" and "protection".
If you would like to schedule a free live video/webinar presentation for your association meeting or event contact Eileen Wagda at 516 747 6700 x 312.