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comment on fire alarm regulation / North Carolina proposed auto renewal law needs to be opposed
May 21, 2019
comment on fire alarm regulations from May 8, 2019 article
            There are several NTS (National Training School ESA) that for years have been pointing out the volatility of the word PROTECT in advertising and especially on yard signs and decals.
Level 1
            We point out that you cannot protect a premises unless you are physically there and bigger than the burglar in order to PREVENT CRIME..
            That is why a number of security companies changed the wording on decals and signs to read  "Secured By" or "Electronic Detection By"
            A similar dichotomy exists in SERVICE AGREEMENTS VS MAINTENANCE AGREEMENTS.
            One you agree to service AFTER BREAKDOWN in the other you agree to MAINTAIN FULLY OPERATIONAL STATUS without breakdown.
            That is why your CONTRACT for SERVICE should be filled out even for T&M calls.
            Keep up the good work we really appreciate the information every day.
Joel Kent
NTS Instructor (still)
            Many alarm companies, “big ones too”, use terms in their contracts that they should not use.  “Prevention” is one of them. “Maintenance” is another term to avoid.  I think NFPA uses that term for fire alarms, but I suggest you don’t. 
            Can you think of any other words that don’t belong in the contracts?
North Carolina proposed auto renewal law needs to be opposed
            North Carolina legislature is proposing a new automatic renewal law and the alarm industry [and all other industries who rely on recurring revenue contracts with renewal provisions] needs to oppose this law as written.  The proposed law would impose arduous provisions and procedures for any consumer contract that automatically renews.  Significantly there is no exception for month to month renewal, which is the law in just about every state that has an automatic renewal statute.
            I suggest you contact your state legislators immediately and the North Carolina chapter of ESA needs to get the ESA lobbyist on board immediately.
            The proposed statute can easily be fixed so it’s both workable and fair.  
            First the law should not apply to any contract that renews month to month.  The alarm industry can live with the proposed legislation with that single additional provision.  The Standard Form Agreements, the All in Ones, provide for month to month renewal.  The contracts would not need to be changed and your procedures would not need changing either.  Without that change however, here is what you will be forced to comply with.
            You will have to provide a Disclosure Statement.  It appears that this Disclosure Statement will need to be separate from the contract.  We will have to add it to the Disclaimer Notice, and the Disclaimer Notice [which you should be using now] will not be discretionary.  The Disclosure Statement will have to include the following:
  *   That the contract will be automatically renewed if the consumer agrees to the contract.
  *   The length of the initial term of the contract and the length of each renewal period under the contract.
  *   The amount to be charged to the consumer for the initial term of the contract and the amount to be charged to the consumer for any renewal periods.
  *    If any terms of the contract will change upon contract renewal, a list and explanation of those terms.
  *     An electronic mail address, mailing address, toll-free telephone  number, or another cost effective, timely, and easy-to-use mechanism  that the consumer may use to terminate the automatic renewal.
  *    Obtain the consumer's affirmative consent before charging the consumer for an automatic renewal.
            Note this last item.  You will have to get a new consent before charging the customer for an automatic renewal.  I assume [which is never a good thing to do when it comes to the law or trying to figure out what the esteemed legislators were thinking or how the eminent courts will interpret the poorly drafted legislation] that “charging” will mean hitting the credit card or ACH, but watch out if it means “enforcing” or “invoicing”.  If it does that on that meaning then you will need affirmative consent to renew.  You may as well get a new contract signed.
            But also note that the proposed law will also require that you disclose the not only the term of the initial contract and the renewal term, but the total owed for those periods.  Remember, this will need to be in a separate Disclosure Statement.
            You need to get moving on this now if you’re doing business in North Carolina.  Fight GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2019 H 2 HOUSE BILL 686 

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301