see below for
comments on ECV and terminating monitoring
September 15, 2010
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Electronic contracts are legal and enforceable. There are several articles posted on the subject at http://www.kirschenbaumesq.com/emailarticles.htm.
But are electronic contracts worth less, or nothing at all, if you want to sell them? Below are comments on the issue. I haven't done a deal where the contracts were only electronic so I can't comment on whether a buyer, any or every buyer, would object to electronic contracts. I suspect that over time electronic contracts will be the only available, so buyers will be forced to figure out how to create safeguards and buy the contracts.
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RE: Electronic Signatures
Ken:
I’m working on three acquisitions as I write this. Jim Wooster runs, from what I can tell, the only/largest alarm funding company in the U.S. The Davis Group suggested him to me for financing acquisitions and many of the larger alarm companies in the country have used Jim as well. Jim told me that under no circumstances would he or his lenders accept digital signatures. I’ve been looking at do this myself but backed off when I heard this. While digital signatures would be nice and will be the norm in years to come, they won’t help you if you want to sell the account. I disagree with this but, until digital signatures are more widely used/accepted in the alarm business (and most importantly: court tested), I think the alarm company owner is going to have problems selling those accounts.
David Myers
Myers protection Services
Indianapolis, IN
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and here is what Jim had to say
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to David and all:
Not quite what I meant.
My thoughts on this matter have nothing to do with whether facsimiles or scans
or copies are legally binding. My comments are soley about the value in a sale. Therefore a court test is not the issue. In our industry, contracts serve multiple purposes. In the case of
a sale they are almost like currency.
The value is determined by the demand. And if buyers want originals, for
whatever reason, then originals have value. If they don't want copies, for
whatever reason, then copies have no value. One of the main reason buyers want originals is so they can have confidence that the seller is not selling a multiple copies to multiple buyers. It's happened before!
As long as buyers insist on "ink" originals, that's what potential sellers
(and borrowers) should use. Not very green, I admit.
As for our size, we aspire to David's description but we're not there yet!
I'm ok with you circulating my comments. I'd be curious as to whether buyers all hold this point of you. It would also be interesting to hear from brokers.
Thanks for fostering and facilitating these discussions.
Jim Wooster
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Question:
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Mr. Kirschenbaum,
We enjoyed meeting you at RRUG a few weeks back and purchased all of your contracts. I spoke with Eileen today with a question and she directed me to you. We would like to move toward a paperless office as much as possible. We'd like to keep only scanned electronic copies of our signed contracts instead of filing cabinets full of paperwork. Is that wise?
Thank you for your help.
Suzanne Ainsworth
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Answer:
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See above !!
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comments on ECV and terminating monitoring
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Ken,
you always entertain the most interesting of subjects. With ECV we have another example of how others are going to police our industry if we do not do it ourselves. Many times the local police authorities will use their 'false-alarm dispatch' data to justify needing an increase in the budget. So we have that motivation to contend with too. We can't blame the Video Verification crowd for trying to make the most of a market niche. Obviously presenting a picture of a criminal act trumps just hollering for help. But discrediting more traditional security systems, designed, installed, and serviced well, isn't smart; and isn't good for our industry. There are enough well-established features and benefits to the products to be successful without that. If we want to point fingers at a worthless excuse for a security system, let's do it at those with unprotected phone lines and only an inside sounding device.
Zeke Lay
Comtec
Oklahoma
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Ken,
In response to John E’s comment on an FTC display, this only occurs if the system FAILS to communicate. Regardless whether the account is in service or not, the monitoring station receiver will still receive and acknowledge the receipt of signals, providing no indication to the user that the signal has been “dumped” by the CS automation system. Even if an automation system were set up to reject closed accounts at the receiver level, the FTC would only occur after an attempted communication from an alarm, trouble or supervisory event. For terminated accounts we send proper notice through the mail and always attempt to “de-program” the system through remote access. If we cannot confirm that the system has been re-programmed by us or another company, we will block the account number from being re-issued.
Tom B.
OSCS
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Dear Ken and Leo,
First, kudos to Leo for recognizing the value of ECV.
SIAC will assure you that applying ECV to your accounts (((for burglary signals only))) will result in an immediate reduction in the number of dispatches of around 25%. As you gain a better data base of cellular numbers that can build to over 60%!
Remember that almost 80% of all alarms are due to user error and to err you must be there so simply we're just not reaching the customers on the first call. Having been there from the inception of ECV I can tell you that this one simple process, if adopted by 100% of our industry would take the major heat off our backs.
Those who argue against ECV simply don't understand how it works or why it so effective. On that second call we're not asking a customer who is not at the site to make a guess. You'll find that most have just left the premises and know exactly what caused the alarm. If you educate your operators to simply ask if the party on the phone knows why the alarm may have gone off, and if they don't and aren't still sitting in their driveway, then dispatch. The irony is that by reducing dispatches you're actually improving response times as there are fewer calls waiting to be dispatched.
Finally, ECV is an ANSI approved standard. The full standard is title is (((ANSI/ CSAA CS-V-01-2004 .XX))) and is available through the CSAA or SIAC.
Ron Walters, Director
SIAC
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Ken,
You should tell your alarm dealer audience to move to ECV as a matter of course regardless if it is required. Our company in 1994 switch to ECV to fight customer false alarm issues. It works! We have had the lowest false alarm rate in our area of the major security companies for better than 16 years. Currently the jurisdictions are all moving to require ECV because of our results.
Bob Hanley