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Defaulting subscriber and collection issues / central stations to avoid
August 21, 2019
Defaulting subscriber and collection issues
            First and foremost thank you for all you do for our industry. I sleep a lot better at night knowing we use your contracts. 
            We have numerous FDNY Accounts with one owner.  All buildings have your Fire All in One contracts signed, which you also initially negotiated for us with their representative.  They are routinely paying their monitoring and service and inspection quarterly bills late.  On average I would say 45 days.
            My question is, can we refuse to do service calls until we are paid on each specific building that is past due?  
            We are going to show up regardless because it’s life safety, but we are just curious in case the billing issue gets completely out of control. It seems like the payments are becoming more and more past due. 
            Thanks again for all you do and if you decide to post on your daily (which I look forward to every morning) please post,
            It typically takes many years in business to figure out that you can all the customers you want if you don’t charge them; tuff way to earn a living though.   
            The All in One agreements are designed to provide protection against claims and increase equity in your business.  The contracts are worth more than other form agreements because they are widely used and recognized.  One feature of the agreements is the collection side.  In the event of subscriber default the All in One provides a quick way to resolve any dispute and enforce the terms of your agreement.  There is no point entering into long term contracts if you don’t intend to enforce them.  No matter how selective you are with your subscribers there are going to be defaults.  
            Subscriber payment practices are, at least to some extent, learned over time and you contribute to the pattern by accepting late payments.  If you routinely insist on prompt payment your subscribers will learn the pattern.  While there are no late charges in the All in One [yes, we will add them for you if you want for a nominal charge] you do have the ability to accelerate the balance of the contract.  You also have the right to terminate services.  You can charge interest on late payments.  You can demand attorney fees if you have referred the account to counsel.  
            Your remedies in the event of subscriber’s default should be clear from the terms of your agreement.  If you use the All in One agreement then you have the right to terminate all services; the subscriber still owes all payments under the agreement.  If you pursue collection against the subscriber it will be for 80% of the balance of the term of the agreement, plus legal fees.
            Be careful to treat each contract with a subscriber separately, unless they are, by their terms, cross referenced.  Just because the subscriber defaults on one contract does not permit you to terminate service or without service on another contract, again, unless they are linked.  
            If you use the Standard Form Agreements then K&K will represent you through the arbitration process; hopefully we will be able to recover from the subscriber once that process starts.  The advantage of using K&K for collection is that we will commence the proceeding within a day or so of you assigning it to us.  Your subscriber will get the Demand for Arbitration within a week of you sending it to us.  Pursuing your defaulting subscriber quickly and aggressively makes all the difference between a successful collection proceeding and a waste of time and money.  If you have delinquent accounts contact Miranda Diaz at  or 516 747 6700 x 319 for our Commence Litigation Package.
central stations to avoid
                A good client asked me to review a central station’s Dealer Agreement.  The central station was not happy when my client advised that I would be looking over the agreement.  Turns out it was a ripped off version of my standard Dealer Agreement, with bunch of provisions changed or just left out.  I provided by client with a Rider to the agreement which has terms essential to every dealer with every central station; terms that are very fair to both sides, and certainly not something a central station should object to.  
            When presented with the Rider this central station simply said it would not make any change to its Dealer Agreement.  I’m not going to reveal the central station.  I did delete the owner from my email list since he clearly has no need for my advice or the advice others give on this forum.
            This central station is not on The Alarm Exchange.  Good thing, because I would have removed it.  Here’s what I recommend:  Use a central station that’s on The Alarm Exchange.  They all don’t use my forms; they all don’t heed my advice; but what they all do share in common is that they have no complaints from dealers that would justify removal from The Alarm Exchange.  I expect that all would listen to reason and conduct themselves fairly with their dealers.  Like all marriages, sometimes disputes arise between the central station and the dealer.  What’s important is that each party listens to the other and endeavors to fix the problem.  If not fixable, move on and part amicably.  
            The arbitration provision found in my recommended Dealer Agreement is important to both dealer and central station because it affords the procedure to resolve the dispute quickly and economically.  Litigation and arbitration can be expensive and time consuming, often wearing out the parties before a decision has to be rendered.  The arbitration company designated in the Standard Dealer Agreement uses simple rules and matters can be determined in weeks for hundreds, not tens of thousands, of dollars.
            My advice to my client, don’t use this central station.  That’s my advice to you.  There are many approved central stations on The Alarm Exchange. Use one of them.

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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