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    A recent article in Security Sales and Integration Magazine, under the Business Management section, entitled "Alarm Companies to Pay ADT Nearly $4M for Deceptive Sales Practices" is worth noting.  ADT pursued claims against two other alarm companies for damages arising out of the other companies' salesmen engaging in deceptive business practices, including claiming affiliation with ADT.  One can hardly blame ADT for taking an aggressive posture to protect its market share.  Though I suspect that ADT is all about new sales it is not surprising that it would sit by and allow attrition caused by other companies aggressive sales techniques, including alleged deceptive practices,  ADT reportedly settled for $2.2 million from one company and $1.5 from another. 

    I get lots of calls from alarm companies complaining that another alarm co is poaching its subscribers.  What can be done about it?  Not much unless you have the deep pockets, like ADT, and as a practical matter not much should be done unless the poaching is pervasive, as in the ADT cases.  In order to prove these cases you generally need the cooperation of the subscribers.  When you;ve lost a handful of accounts it may be difficult to get a subscriber to support your case.  In the ADT situation there was widespread conversion of accounts so the "proof" was easier to obtain.    These type of cases are costly to pursue and you have to balance the economics.  ADT's rationale for pursuing its claims was to "protect consumers" and protect its "reputation".  No mention of its market share and recurring revenue.  In any event, as I've often pointed out the obvious, you're not ADT, so pursuing these improper competitive cases should be started only after a good deal of consideration.  You may want to wait a few months before you react to the loss of an account under these circumstances so it's not your emotions making your decision.  On the other hand, I do not suggest taking no action if your accounts are under attack from another company.

    Sometimes these issues can be resolved quickly.  Probably what made this article catch my attention was that same day I read it I got a call from an alarm co client who said his ex salesman was stealing accounts for his new employer alarm co.  I wrote to the new employer, advised that the salesman was under an Employment Contract that restricted him from soliciting his former employer's accounts.  The new employer promptly got back to me that the salesman had not yet sold an account but that he would be instructed not to violate his agreement with his former employer.  Good idea, especially since I also rep the new employer.  Be sure that all of your employees have signed an Employment Agreement.  It will help when you need it.

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Here is the article that appeared in SS&I on line version.  Thanks to Scott Goldfine for allowing me to re publish it.

 "Security Sales and Integration Magazine"

 BUSINESS MANAGEMENT

Alarm Companies to Pay ADT Nearly $4M for Deceptive Sales Practices

 BOCA RATON, Fla. — Several alarm companies have settled lawsuits with ADT in response to claims that the firms misled consumers to believe the companies were affiliated with ADT.

ADT filed a motion for contempt against West Palm Beach, Fla.-based Security Networks and its Orem, Utah-based affiliate Vision Security after learning about additional claims of deceptive sales practices, despite a previous preliminary injunction against the company banning such practices.

The companies have agreed to pay ADT $2.2 million in damages. Additionally, Vision Security, which is also being sued by Ohio Attorney General Mike Dewine for deceiving consumers, agreed to a permanent injunction, prohibiting it from using deceptive and misleading sales practices when dealing with customers.

“ADT pursued these actions to help give consumers in the electronic security and automation market clarity on the products and services they choose to help protect their families, homes and businesses,” says David Bleisch, chief legal officer at ADT. “Maintaining the trusted reputation of the electronic security industry begins with companies behaving ethically.”

Separately, ADT settled its lawsuit against Los Angeles-based Security One, requiring it to pay $1.5 million in damages for telling customers that their alarm systems required upgrading. Security One also consented to a permanent injunction, banning the company from using such practices.

“We will pursue additional lawsuits against other companies that misrepresent ADT or its services to consumers,” says Hannah Lim, chief litigation counsel at ADT.

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                                    Speaking Engagement 

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October 22 - 25, 2013  Texas Burglar & Fire Alarm Association.  San Luis Resort Spa & Conference Center

Galveston, TX.  registration: http://tbfaa.org/annual-convention/   For more information contact 

Brad Shipp – 877-908-2522 exdirector@tbfaa.org; Debi Ulmer - 281 859-4569  debi@dispatchcenter.net

Classes; trade show; golf; 


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Webinars

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December 4, 2013   12 noon EST  Register here: https://attendee.gotowebinar.com/register/4919260455763006721

     Title:  10 Things Residential Security Alarm Companies should consider BEFORE entering the world of Commercial Engineered System Fire Alarms

      Presented by:  Bob Williams, President of Briscoe Protective Systems and his Management Team. 

Briscoe Protective Systems has been in the industry for 35 Years and has made the transition from a Residential Alarm Company in the late 70’s to a Engineered System Fire and Security Company that is an SDM Top 100 Company. Find us on the web at www.BriscoeProtective.com or on LinkedIn under Companies, Facebook and Twitter@BriscoeProSys 

      Description:  There is a big difference between installing Residential Fire Systems and Commercial Engineered Fire Systems and there are “Key Factors” that Security Company’s should consider before attempting to go into this lucrative but challenging market.

      Who should attend:  Alarm company owners and fire techs.  

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