Question:
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Ken,
What is your opinion, or do you have a form for service & periodic
inspections for PERS systems?
Thanks,
Mark
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Answer:
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Personal Emergency Response service has certain characteristics that separate it from other typical alarm monitoring services. In fact, in many jurisdictions, PERS is not considered an alarm system and is not included in the alarm license.
Here are some of the plus characteristics of PERS that makes it attractive to alarm companies and particularly start up alarm operations.
There is usually no installation offered. Self install instructions are delivered with the base unit and remotes.
Sales are typically through mail or other delivery services and therefore can be made anywhere in the US. This permits mass marketing opportunities.
There is no on site service. Defective units or remotes are required to be shipped back to the alarm company where they can be repaired or replaced.
Equipment is relatively inexpensive, perhaps $200, and with no labor for installation or service, the outlay to a new subscriber is minimal.
Invoicing is usually annually or semi annually, so you avoid the expense, and uncertainty, of monthly billing.
Almost all wholesale central stations will provide PERS monitoring.
PERS sales lend themselves to on line or electronic signature of contracts because of the mass multi state marketing strategy. Subscribers will be asked to provide personal information often required to provide the PERS monitoring service and that will provide a good opportunity to get the PERS contract signed.
Once the contract is signed and the unit shipped and the account set up at the central station, all you have to do is send out the invoices and wait for payment.
Sounds pretty rosy. But here are the negative characteristics of PERS monitoring service that puts alarm companies at risk.
Insurance companies that provide E&O to the alarm industry are reluctant to write the insurance for alarm companies who provide only PERS service or a significant percentage of PERS business. I don't have the stats on this; maybe some of the insurance brokers would care to comment.
PERS monitoring is often misunderstood by the public, especially if there is a failure or delay in responding to an emergency situation. PERS service never includes personal response, only notification to authorities.
PERS service usually includes the option for the subscriber to provide medical and other personal information which will have to be safeguarded by the alarm company pursuant to non alarm laws, such as HIPPA.
There is little if any testing of the systems, especially if not initiated by the subscriber. A case a year or so ago involved a subscriber who plugged the telephone wire into the jack upside down. Of course it didn't work. She collected $800,000 from the alarm company's insurance carrier - who then promptly canceled the insurance policies leaving the alarm company without insurance coverage.
Wholesale central stations will likely want more money to monitor these accounts because a signal will require a voice conversation between the operator and the subscriber to ascertain the reason for the PERS signal.
Failure to reach anyone when a signal comes in presents the operator with the hard choice of treating the signal as a false alarm or dispatching EMT personnel.
Subscribers are typically elderly. In most states you cannot hold a subscriber to a long term contract, and there are usually statutory provisions that permit cancellation of the contract under certain conditions, such as nursing home care, inability to operate the system and death [none of which would be a defense to other alarm system contracts].
PERS contracts are usually worth less on the open market. You cannot expect to sell for 35 times RMR.
There is virtually no ability to pursue delinquent subscribers or those who fail to return leased equipment, especially if you are providing service in multi states. Subscribers will be convenient to sue and in any event the amounts in dispute will be minimal.
All subscribers are consumers, as opposed to commercial accounts. Your contracts will be held to strict scrutiny by the courts, and you will have to comply with a slew of consumer laws in multiple states where you provide your services. Your central station will have to authorized to provide monitoring services in the jurisdiction and will have to comply with local monitoring regulations.
PERS service should be something you offer; don't be afraid of it. But be sure to use proper PERS Contracts and be sure to use a central station that is comfortable, and experienced, with PERS monitoring in the states you intend to ship your plug and play units. Non traditional alarm businesses are in the PERS monitoring business - and there is no reason to give up this business and revenue. Go for it - start by getting a PERS Contract.