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COMMENT ON DIY AND MIY AND UNLICENSED ACTIVITY
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Ken,
Regarding Morgan Hertel’s comments on DIY and licensing on September 12, 2016, I wanted to say thanks to Morgan and Rapid Response (and to any other central station) for taking the position that they adamantly require their dealers including the DIY + PRO dealer to have proper licensing in the market where they do business. That’s integrity, the way it should be done by all central stations. I strongly believe that the central station industry plays a critical role in maintaining and improving the relationship with the law enforcement community by holding the security dealers that they provide monitoring services for responsible for following the rules like everyone else. Some have integrity, unlike others who like to play cat and mouse with license issues.
Other readers of this forum have been asking me about unlicensed DIY companies. First off I want to clarify who we are talking about in the DIY market space. A DIY dealer that only sells hard goods without any further relationship with the customer is viewed different from a DIY dealer with a continuing RMR relationship with the customer even if the relationship is month to month or on demand PRO monitoring. I refer to them as DIY+MIY (monitor it yourself) and DIY+PRO (professional monitoring).
Arizona state law and the Phoenix alarm code specifically addresses the DIY+MIY as a proprietor alarm system and DIY+PRO fits the definition of an alarm business that requires a license for the company selling or receiving payment for monitoring from the subscriber. So, if the DIY dealer selling the product is collecting payment from the subscriber for monitoring and is using a third party central station then both the DIY dealer and the central must have a license. All central stations that are monitoring accounts in Arizona are required to have an Az alarm business license regardless of the dealer license status. A central station is not covered by the dealer’s license and a dealer is not covered by the central’s license.
Those of you installing traditional alarm systems that have focused your sights on demeaning the DIY+PRO security systems over license issues or by claiming it will lead to bad installs need to realize that these bad practice accusations are not unique to the new DIY kid on the block. The traditional security industry has its share of license dodgers, trunk slammers and account flippers.
There are plenty of PRO install companies that are not properly licensed in their market or are employing unlicensed techs. Then there are out of state PRO install companies that are not licensed who are collecting RMR for systems in another dealer’s home turf. There are unlicensed central stations monitoring accounts in jurisdictions that require the central station to have a license. In some jurisdictions like Arizona, even the investment groups that purchase the paper contract for the RMR but never “touch” the alarm system must have an alarm business license under the name of each company that they do business as.
If you think DIY security system installations are going to cause a problem, stand by; this is only the tip of the iceberg for public safety as technology evolves. Remember to take into account all of the new technology available to consumers like medical alert, panic alarm apps, geofence alarms, activity timers, all the MPERS -smart phone apps that the techies develop and other IoT devices coming to the market.
What about the DIY homeowner who called PD to request dispatch because their IoT garage door opener with a smart phone app just notified them that the garage door is open? That is exactly what happened in Mesa Az. and the DIY+MIY homeowner complained because Mesa PD charged him for a false alarm. I am waiting for the day somebody calls PD because their IoT refrigerator is telling them that their food is spoiling because the door is open to long and they swear that a bad guy must be in their home that opened the fridge door. Maybe PD will arrest their teenager.
Licensing and enforcement is different from state to state, city to city. I spend time talking with alarm coordinators from other jurisdictions about what is going on in the industry to let them know how the game is played, but at the end of the day it is up to each jurisdiction to find a licensing and enforcement method that works for them. The jurisdictions with effective enforcement will get compliance and the others who bark and never bite will get a sore throat. I would suggest that if you have heartburn over the unlicensed alarm dealers, then you should become active with your state or national alarm associations and work with the local AHJ to develop an effective alarm ordinance with enforcement that makes it fair for everybody. Instead of ranting about it, do something, say something, and be proactive like Morgan with RRM.
We do what we can in Phoenix by intentionally looking for unlicensed alarm companies and central stations when deciding which subscriber is going to be inspected. I just processed this month’s inspection list and have 5 unlawful alarm companies out of 21 companies that were reviewed. This is typical. If you’re unlicensed in Phoenix it is just a matter of time before you get caught. I may not be able to reach out and touch the CEO’s from the out of state alarm company or central station in person, but their customer is a sitting duck. For some reason I have found that subscribers don’t like being told that they can face criminal charges if they continue operating their alarm system because their alarm company or alarm tech is not properly licensed.
Last month I snagged three unlicensed out of state alarm companies and one unlicensed central station thru a single inspection. One of the alarm companies was pretty torqued off because their customer was a national chain retailer that had multiple accounts including 12 Phoenix locations that cancelled their contracts to go with another “licensed” alarm company. Just today I had an inspection scheduled with one of our larger local alarm companies that chose to fall on their sword and postpone the inspection for “administrative issues” at the last minute in order to avoid having the embarrassing confrontation with their subscriber. I guarantee they will have their license in order ASAP before the next inspection.
I have been thru this scenario several times over the years with alarm dealers who represent themselves to be a “national” installation alarm company that lands a major corporate account and rolls out multiple installations across the country using local alarm companies as subcontractors. I have seen the quality of the alarm systems that were installed using the “shotgun” method to hire local subcontractors that get paid piecework for a onetime job to represent the “national” alarm company.
If the unlicensed DIY company is bothersome, how does the industry feel about the dealers who jump thru all of the hoops to get a proper license and then take the subcontracted job from the out of state unlicensed alarm company who gets to pocket the RMR from a customer that is right in your own backyard without the hassle of getting a license? In Phoenix it is a criminal violation for the alarm company that takes the subcontracted work from the unlicensed alarm company. We do our best to support the local industry and the out of state dealers who comply with the license laws. It is only a matter of time before we catch you at this game.
If the license status of the DIY+PRO dealer is causing problems for the industry, then the central stations that turn a blind eye to these issues are facilitating this problem. Centrals, why don’t you step up to the plate and require your dealers to provide their license credentials in the jurisdictions where they are required before you monitor their accounts?
`If you are one of those who are advocating that dealers should make a statement by pulling your monitoring accounts from a central that supports DIY, then make sure you take your accounts to a central that has integrity and the fortitude to stand up and require proper licensing for all dealer accounts they monitor in all jurisdictions. Be careful who you chose to partner with because the central that you choose may be supporting unlicensed “national” pro install dealers with lucrative RMR accounts that you are missing out on right in your own backyard.
The various alarm associations are doing their best to make peace with the public safety community. They can help you by providing license information and guidance with the process. Several alarm associations have been successful working with public safety to get a single license authority for the entire state in order to make it easier. Who knows, maybe the day will come when there is a federal alarm business license that is acceptable in multiple jurisdictions.
So, if you are one of “them” here is something to make things easier for you, there are license guides available from organizations like SIAC, and ESA. The SIAC / TYCO list is a huge benefit to the central station industry because it goes into details like who is responsible for the subscriber permit and ECV requirements. Ken’s web site has a list of license laws by state and I’m sure Ken has just the right person that can help you thru the process of getting licensed. The False Alarm Reduction Association would love to hear from you and can put you in touch with the local AHJ around the country. (FARA is the national association of the public safety jurisdiction alarm coordinators) So what are you waiting for?
Thanks,
Detective H.W."Robbie" Robinson
Phoenix Police Code Enforcement Unit , Alarm Inspections
Phoenix, Az
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RESPONSE
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Robbie catches a lot of heat on this forum ocassionally for his forthright opinions, and as the AHJ he is entitled to those opinions. Today he is right in all respects. Here are two points he makes [he had a lot to say and I don't want you to miss this]
- A central station is not covered by the dealer’s license and a dealer is not covered by the central’s license.
- In some jurisdictions like Arizona, even the investment groups that purchase the paper contract for the RMR but never “touch” the alarm system must have an alarm business license under the name of each company that they do business as.
I had to think about the challenge to the central stations to weed out the unlicensed alarm companies. However, I think Robbie is right. A central station should not monitor for an unlicensed alarm company. Though the licensing process, especially nationwide, is not easy, our Alarm Licensing Department can assist by letting you know where you need to be licensed, how you get licensed, finding you a license qualifier, contracting with the license qualifier and providing you with a nationwide agreement that fits your business model. For more information contact Jennifer Kirschenbaum,Esq at 516 747 6700 x 302 or Jennifer@KirschenbaumEsq.com or Of course you can also contact me.
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