QUESTION:
Dear Ken:
We love your E-mailings. Have a question.
There is some new equipment on the market that is being promoted to be able to unlock or 'hack' into alarm panels. These devices are promoted to supposedly allow another alarm co. to takeover or 'slam' (a term coined in the telco world for stealing a customer) even if the original installing company has changed the installer program access code. We program our systems with an exclusive installer code to prevent unauthorized entry into the programming sections since our systems are leased (the equipment belongs to us). This helps to prevent the customer from messing up the operation of the system & to protect our owned equipment from being converted for the benefit of a 3rd party (a slammer!)
So, who is liable if this scenario takes place: 1)The customer? 2)The manufacturer &/or the supplier of this hacking device? 3)The original alarm panel manufacturer for not supplying adequate protection against this sort of thing? 4)The takeover 'slammer'?
I could definitely see a company like Intel, Apple or Microsoft going after anybody who supplies, manufacturers or uses a device that could hack into their systems or software! What are your thoughts?
D. Simms
Security Group
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ANSWER:
So now alarm companies who take over accounts by simply reprogramming your panel have a new name, slammer. Stealing accounts is now called slamming. Sounds like the same old cause of action to me, conversion.
Conversion is a tort action where the owner of the property is excluded by another from that property. In this case, another alarm company and your former subscriber, take over your equipment, exclude you from that equipment and they use it.
Certainly the subscriber is liable. Probably the new alarm company also, but you need to show it knew the equipment was yours and not the subscribers.
Manufacturers are not liable because slammers make their way into the panel unless the manufacturer claims the panel is designed to prevent hacking. I don't know if any manufacturers make that claim, but I doubt it. For one thing, they aren't they may not care about slamming, although more panels would have to be sold if they self destructed upon unauthorized hacking. Not a bad idea.
I routinely recommend that alarm companies whose equipment is converted [the slammee] refrain from suing the new alarm company [the slammer]. Better to limit your lawsuit against the subscriber. Suing the new alarm company with the subscriber builds in an expert for the subscriber.
My standard contracts have a provision that permits the alarm company to opt to sell the equipment to the subscriber for the agreed value in the contract. Thus, there is not need to start a conversion action. The contract action for the value of the equipment is much easier to prove than the conversion action. If you don't have this nifty feature in your contract, then get mine. www.alarmcontracts.com.
On a related note, how do you make it more likely that another alarm company can't come in and claim they had no idea you owned the equipment? Some like to file UCCs that state the equipment is owned by the alarm company. That's not really the purpose of the UCC. I suggest stickers on the panel and other equipment identifying it as your property.