Question:
Hey Ken,
I've got one more for you. Let's say you've got a customer that's a real pain. Constantly complains. Even though you've tried to call him several times and even left a message he says he never got the message and clearly implies your lying to him and never called him. I've got a customer right now I've been through three unhappy events with and don't seem to be able to make him happy. Do I open up myself for legal liability if I just tell him it's time to find another alarm company and refund any prepaid service?
Best regards,
Lenny
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ANSWER:
You can be held liable for breach of contract, just like your subscriber. If you decide to dump your subscriber you subject yourself to a lawsuit for breach of contract, the damages for which are the difference between what your subscriber agreed to pay you and the expense charged by someone else willing to perform your services.
My contracts give you the right to raise your prices. If the subscriber doesn't want to pay those increased rates you can terminate service. That's a better way to get out of a contract you'd rather not perform.
Other ways out include selling the account, preferrably to someone you really don't like. Or, have a chat with the subscriber and see if you can talk some reason into the relationship.
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Question:
Thanks for the info.
We are in CA. We have two subscribers who are currently asking for refunds. First one's house foreclosed and he paid annually. He paid $330 in July 08. His house foreclosed in Dec 08. He is asking for 6 months refund. His original contract was an automatic renewal for year to year. Plus we have subscribers fill out a cancellation form putting their cancellation request in writing prior to removing them from the central station, so that we don't just take any ones word that they want to cancel. Plus the cancellation form indicates that we do not refund on monitoring services. He signed both contracts. So I think that we are in the right to not have to refund him.
The other is under your contract with a month to month renewal. His house sold much faster than he intended, he paid his quarterly of $89.95 almost 2 weeks ago and would like to have that refunded now that the house has sold. I'm thinking maybe that one I should refund because of the month to month contract.
Any thoughts?
Thanks
Heidi
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Answer:
The issue isn't about much money and the safer practice would be to give the refund. Otherwise you may subject yourself to a consumer complaint and if the agency decides to work you over the cost will exceed the advanced payments.
I don't want you to think I am soft on subscriber refunds; I'm not. However there is legislation that prohibits advance payment for services yet to be performed, perhaps not in your state, but others. You don't want to have your consumer agencies thinking about that kind of law.
Some contracts do contain a provision that advance payments will not be refunded [I think it's in my central station contracts - so if you're a dealer you may want to look for that provision]. If its clearly in your contract then of course you can and should retain the payment. If not clear, then refund it.
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Question:
Hi, Ken
Thanks for your newletters, we find them very informative.
Do you have a Contract that provides some type of disclaimer when installing owner provided audio and video components?
We often incorporate existing equipment into a new system design but we have no way of knowing if their equipment is in working condition. My concern is once we touch it they can say that it worked OK before. I don't want to assume the liability for existing equipment even if we actually did something that might damage it (although we never have damaged anything).
Thank you for your response.
Sincerely,
Jerry
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Answer:
I get comments asking why are there so many contracts. Now you want one more. This one for installing your subscriber's old or new equipment. I don't think you need a separate contract for that. As long as you are doing an installation use the Sales Contract - www.alarmcontracts.com - and provide that some equipment is owner supplied and you have no responsibility for that equipment other than to install it. Your deal may require some additional provision, but since each situation is different, you'll have to seek professional advice - hopefully from me - when the time arises.
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Question:
Ken,
Here's an unusual situation. A subscriber moved into an existing townhouse with alarm system and signed with us a 36 month agreement for Alarm Monitoring Services. He complained about the service call associated with setting up the system regarding a falsing 8 year old smoke detector we were forced to replace and failed to make payments on both the Service call and Monitoring Charges. Although both were SEPARATELY billed charges. Since this was under dispute and for review by our management and we were undergoing a billing software change at this time and his present and future billings were buried.
Just recently during an audit of all our accounts this was discovered. We checked and found monitoring has been performed all during this 36 month period and the customer was aware he was being monitored as the Central Station had over the 36 month period of time responded to several alarms. We personally sat down with them and discussed what had happened but have not received a payment for anything. Im sure he is thinking that I will not bother to sue him for the $ 900.00 owed us since cost of litigation is high. Surely if we pursue this he will simply ignore us and switch over to another Alarm Company anyway.
Should we just walk away and chalk it up to our error in not auditing our accounts sooner ?
I know if my cable company sent me a bill after 3 years asking for payment I would tell them to jump in a lake.
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Answer:
So you forgot to bill your subscriber for 3 years. Now you want to get paid, and you should. No doubt the subscriber will come up with lots of reasons you should forfeit your charges, but thinking they were entitled to free service isn't going to fly. If you really think about it your subscriber more than likely knew you had a billing problem and willingly accepted your service nonetheless. This is tantamont to theft of services.
A good analogy is checking your bank balance only to find out that the bank mistakenly credited your account. Customers have come up with lots of reasons they should have to repay it, but courts routinely require repayment and sometime subject the customer to criminal prosecution for not returning the money.
Give your subscriber a chance to pay and then sue them.
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Question:
Mr. Kirschenbaum,
Recently Pennsylvania enacted a new act named the Home Improvement Consumer Protection Act (HICPA) which seems to require Alarm Companies to register as “Home Improvement Contractors”
We currently utilized your All In One Contract for both Commercial & Residential will there be revisions to this Contract?
Will you offer a new Contract for Residential?
Will you offer a new Contract for Commercial?
Thank You
2009 CELEBRATING OUR 20TH ANNIVERSARY!
Al
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Answer:
Congrats on 20 years. The PA contracts have been changed and you need to get them and use them as of July 31, 2009. No point waiting until then, get them now. www.alarmcontracts.com
The contract changes are for residential contracts only.