KEN KIRSCHENBAUM, ESQ
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ISC Group Discussion Sign-up / Comment on Should you cancel cs charges on 3G customers who lost monitoring but still pay
March 14, 2023
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Comment on Should you cancel cs charges on 3G customers who lost monitoring but still pay from article on February 10, 2023
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Ken,
This is a very interesting posting and response about whether or not to keep billing for monitoring a deactivated or non-supported 3G account.
Back 40 years ago when digital monitoring was the only choice, test timers were add on modules before digital communicators were widely integrated on control boards and the test timer trigger logic was in the panel. But even then, it was not widely utilized. Industry standardized contracts had a provision that resembled that the end-user was obligated to test the system monthly and was required to notify the alarm company of any failure.
Fast forward to radio and cellular, supervision was built into many of the brands and for good reason because it was cheap and the data moves so fast and is so small that it didn't overload the system. But we still retained the contract language that the end-user must test and report any failures.
The difference is that we now know when the radio communication fails. If you have a phone line still connected you could claim the belief that that still works and the end-user still has the responsibility to report failures.
But let's assume the system was an outright sale plus monitoring. The radio failed because the system has been decommissioned and everyone who gets these emails knows it. If the company doesn't get these mails the central station told them and/or the manufacturer told them or they saw an advertisement for 5G radios in a magazine. End result is that you can't claim you didn't know.
Now it took me a long way to get to this, but it’s one word
FRAUD
You kept taking the money for a service you could not provide and had no reasonable expectation that you could provide it tomorrow or any day after the failure. FRAUD
But why am I writing this email? INSURANCE coverage or partial lack thereof.
Your carrier, everyone's carrier does not provide indemnity for fraud. You probably will get a defense because the plaintiff will make claims for breach of contract as well as fraud.
So what is worse, a claim with no contract or a claim with a contract that offers no protection. I don't see how you can wiggle your way out of a claim for accepting money for a service you can't provide.
Bart A. Didden, Executive Claims Manager
Security America Reassurance Group, Inc. - SARG
877-872-1266
bdidden@securityamericarrg.com
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Response
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This issue applies to more than the 3G customers who haven’t upgraded, it also applies to all monitored customers who have, for one reason or another, lost monitoring capabilities. You know the signal can’t get to you because you have line failure or other trouble signals but you keep billing and the customer keeps paying. You’ve sent notice to the customer that the alarm system needs repair. Sometimes you get a response and sometimes you don’t [as was and might still be the case with 3G customers]. Nevertheless, you bill and they pay.
Another perennial question is, do you cancel service with the central station to save yourself the cs charges even though you continue to bill the customer and receive payment?
Think you know the answer? Let’s complicate it a bit. What if you have a Service Plan in place and you are required to service the alarm system? And, what if you have no repair service obligation? Are you monitoring burg, fire, environmental or mechanical conditions [maybe medical]?
I assure you that the first place to turn to answer the questions is your contract. The contract should address your responsibilities and the customer’s responsibilities too. The Standard Form Agreements require the customer to pay the monitoring charges unless the central station has suspended service; there is no suspension of payment if the alarm is not working and in fact the customer is obligated to get the alarm system fixed.
So at first blush you should continue to bill the customer and you can collect payment, at least during the term of the agreement, but likely into renewal terms too. If this was not the case a customer could disable the alarm, or cancel communication pathway, and expect you to cancel. Try telling your car leasing company you surrendered your license and now don’t want to continue paying your car lease or finance payments.
A customer could have a reason to disable the alarm communication and yet still pay, and doesn’t owe you an explanation. Maybe the customer doesn’t have a Service Plan or the repair isn’t covered by the Plan and the customer recognizes the obligation to continue paying for monitoring. The customer is so fed up with you he won’t respond to your efforts to get the system fixed or acknowledge your warnings that there is no monitoring. Something less sinister, maybe the customer moved temporarily or permanently and canceled phone and internet service, but continues to pay bills.
If your contract doesn’t address the issue then you have to search your conscious, or perhaps Bart’s conscious, for an answer. I don’t think the scenario gets to fraud without a lot more facts placing you at fault for intentional conduct to deceive your customer, and that’s not how the facts generally appear in these situations.
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STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com
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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
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com
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