QUESTION:
*****
Dear Ken;
I find your daily emails to be very informational.
Here is what I did with a non-paying customer. It was a bar that was taken over by a new owner. I went there and got a contract signed (one of your contracts) and a check for the first year's monitoring. The system was a commercial fire and burglar alarm.
At the end of the first year, I sent out an invoice for monitoring. The due date came and went. I sent out two more monthly notices before trying to send a proposed cancellation notice (registered letter) that came back to me as undeliverable. Apparently they wouldn't sign for it. After calling several times, I got the new owner on the phone and she was "shocked" that the bills were not reaching her.
I made a comment that it was strange that her utility bills and invoices from her other suppliers happened to get delivered. Understand too, that the previous owner had been a customer for several years and didn't have this problem, and the only change on the address was the name, not the street number or anything. While I had her on the telephone, I faxed a copy of the now five month overdue bill to the bar, and she verified over the phone that she had it in her hand and was reading it as we spoke.
Another six weeks passed and still no payment. Now I got mad and called up the panel and locked it out.
I didn't feel comfortable just terminating service, as it was a commercial fire alarm. On a Monday, I mailed and faxed one last bill, stating that if I didn't receive payment by Friday, monitoring would be terminated. Friday and Saturdays mail delivery came with no payment.
On the next Monday morning, I called up the panel, and zeroed out the central station number. I also posted a little warning on the security console stating: "Deadbeat, does not pay bill." This was a warning to the next guy who might get yanked around. I then faxed in an account cancellation to the central station, and then notified the city fire inspection bureau of the cancellation as well.
The next day a fire inspector paid her a visit and low and behold, she called to tell me this was all a mistake and that she hadn't received any notice and was away the week before. The dumbass forgot that I had faxed her a bill while on the telephone with her two months before.
I let the answering machine pick up and just didn't bother to call her back. I pay my bills, and don't need customers who don't pay theirs.
Do you see any liability on my part? I really think that I was more than patient with this person.
Sincerely,
John from NJ
******
ANSWER:
Quite the story. You showed great restrain not going to the location and buring the building down.
If you are not paid you have a right to terminate service. The question of notice depends on the contract terms, type of service and often other circumstances, such as type of subscriber. Since your monitoring included a fire alarm system in a commercial building you did the right thing notifying the fire marshall, but you should have done that first.
You should have sent a letter, regular mail or fax, giving several days notice, picking a specific termination time and date, and then you should have notified the fire marshall that service would be terminated at that time. You could also send another letter once the termination date passed that service had indeed been terminated. Send that letter to the fire marshall as well.
Make sure you are not in a jurisdiction where you are prohibited from terminating fire alarm service without approval from the fire marshall. Actually, I don't know of any jurisdiction where that might be required - does anyone??
Leaving messages on the panel is risky, especially derogatory remarks. In your case you knew you were dealing with a deadbeat. Be mindlfull that there can be other explanations for non payment, none of which requires you to service a defaulting subscriber, but which may not warrant some of the more personal action you took. It's always better to remain professional. In fact you would be better off turning the subscriber over for collection [my office if you're in New York metropolitan area] than resorting to self help methods. Quick action by your attorneys could get you your money and retain the subscriber, a win win for you.
As far as liability, if the subscriber sufferd a loss you certainly could be a target in a lawsuit. Defending based upon the subscriber's default will likely prevail, but do you really need to expose yourself to that claim. Since you had my monitoring contract signed it was for 5 years and there was a default after one. Sounds like a good lawsuit to me.