Question:

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Dear Ken-

    I was recently approach by a company (because of my experience in the alarm industry) and was asked about the Self-Install model or the DIY [do it yourself] alarm system.  They referenced companies like Protect America and a couple of others.  They are claiming that their legal counsel told them that if they sell 100% online and through a call center that they would not be required to have alarm licenses in the states where the customer resides as long as the monitoring center that is providing the monitoring service is fully licensed.  They claim that because they are not “physically” selling in the state or entering the home to perform the install, that the license is not required.  My question to you is, IS THIS TRUE?  Being a true promoter of the benefits of alarm services, I would hate for this group and any potential customers to find themselves in trouble.

    I appreciate the opportunity to send this email and hope that it is worthy of a reply!  Thanks for you time in advance.

Mike Stewart

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Answer:

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    The most prudent response I can give is that you must check the alarm license law in each jurisdiction you intend to sell the equipment.  If you are mailing equipment to be self installed it is not likely that any alarm license is applicable.  However, if after installation you will be providing monitoring pursuant to your monitoring contract, you will need a license in some jurisdictions.  If you are signing the contract to provide monitoring, and the state requires a license for monitoring, I think you will need the license, even if you subcontract the monitoring to a wholesale monitoring company that has a license in the jurisdiction. 

    The reason is sound for this conclusion.  You have not been qualified to provide [or offer] monitoring nor have you paid your license or registration fee to the state.

    If you are not entering into a monitoring contract but allow your central station to enter into a direct contract with the subscriber, then you are out of the loop.  But that's not a good idea.  You want the accounts to be yours.