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Central Station Taking Over Dealer Monitoring Accounts - November 25, 2016

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CENTRAL STATION TAKING OVER DEALER MONITORING ACCOUNTS
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Ken,
    Thank you, as always for the articles and also thanks for updating them on your website. 
    We are a contract monitoring station. One of our long-time clients, a licensed alarm dealer, has gone out of business, and has abandoned its mostly residential subscribers, who own (rather than lease) their systems.  Yes, this actually does happen.
    Our Accounting Dept states that the alarm dealer does not owe us money for past services.  These Subscribers' alarm systems report signals to our telephone numbers, and for those, no re-programming is necessary.
    We are in contact with the Subscribers, many of whom wish to continue using our monitoring service on a direct-bill basis going forward. As they are already "online", this is easy for us to do.  We already have the online zone & signal data, and call-list, in our computers, as previously provided by the alarm dealer.
    We are presenting our standard (Kirschenbaum) agreements to the Subscribers, for their approval for us to continue monitoring for them, using the existing online data.  As part of this process, each Subscriber also receives a full-file printout of the online data previously provided to us, for their approval/correction.
    Can you discuss liability issues that could arise out of re-use of the online data, as previously provided by Subscriber's agent, the out-of-business alarm dealer and ways to minimize the liability?
    Our procedure for other types of takeover situations might include being paid to inspect/test all devices, and to determine accurate zone description, and for the signals that each zone transmits. But these things were already done, one would expect, by Subscriber's agent, the out-of-business alarm dealer. 
Anon
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RESPONSE
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    As a central station you rely on the dealer's agreement with the subscriber, the dealer agreement with the dealer and [if not satisfied with the subscriber agreement used by the dealer, a direct contract with the subscriber, referred to as a 3 party agreement.  Since your dealer is out of business [and I am surprised that the accounts were just abandoned instead of sold] you obviously can't count on the Dealer Agreement and more than likely this dealer didn't use proper contracts.  Your 3 party contract is not intended as a direct primary monitoring agreement with the subscriber.  For one thing it doesn't require the to pay you.  You need a direct monitoring agreement with the subscriber to continue monitoring safely.
    You already have exposure for monitoring, but that exposure didn't include the condition of the alarm system at the subscriber's premises.  Once you "take over" monitoring service directly you will face more exposure for the systems [which you could exclude by contract].  These subscribers should be required to sign either the All in One Agreement or at the very least the Monitoring Agreement, making it clear that no repair service is required.
    As far as checking zones and signals, that's something you should have already done.  Do it again if you are uncomfortable.  Either way, you will be exposed to liability for zone and signal communication mix- ups. The All in One Agreement will provide contractual defenses, but you'll be exposed for "gross" negligence, so avoid that.
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