Customer requests cancellation of their security alarm accounts “effective immediately” or on some specified date.  They often owe for months remaining on the contract. 
    Is it correct for us to discontinue the monitoring at the central station on the date they request even though we are billing them for the remaining months on the contract?  Or, should we continue to monitor the security alarm system through the period for which we are contractually obligated?
    Our concern is that if we discontinue monitoring on the requested date we are not fulfilling our contractual obligation and we are billing the customer for the contracted months.  If we have canceled the service on a date prior to the term end date could we have some liability issues if there is an alarm event?
    Thanks very much for helping us with this.
    Good questions that raise two significant issues. 

  • going after the subscriber for balance of the contract payment obligations
  • defending yourself from liability claims for subscriber loss

    Let's start with the liability issue.  If your subscriber requests cancellation of service then you are permitted to terminate service in accordance with the request.  Be sure to retain the cancellation and do not accept instruction by telephone unless it's reliably recorded and you retain the recording.  Better practice would be to insist on a writing in some form, including email or fax.  You should confirm the cancellation in writing.
    Now for the collection issue.  You need to be careful when you take the call from the subscriber and when you write the subscriber confirming cancellation of service pursuant to subscriber's request.  You need to be clear that it was the subscriber who canceled and that you have advised the subscriber that there is an outstanding contract and that the subscriber is responsible for the payments pursuant to the contract terms.  In other words, you are not consenting to early termination and waiving the balance of the payments.  Many subscriber think that your acquiescence of the cancellation constitutes your agreement to early termination without penalty.
    When your subscriber cancels you are not obligated to continue monitoring or any other service.  If your subscriber claims that the cancellation is because the system doesn't work or it's not being used, and the central station shows activity on the account, you should continue to provide monitoring service at least until you commence an action against the subscriber.  If you use the updated Standard Form Agreements my office will represent you against your subscriber, at least through the arbitration proceeding.  Contact our Contract Administrator Eileen Wagda to inquire about updating [or getting] the Standard Form Agreements and using our collection / litigation department to represent you.