Question:

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Ken:

     I pre-wired a home about 5 years ago and the system included Alarm and smoke detection throughout the home.  The house was lived in for about 3 years before the bank took it over and that customer canceled, no problem.

    New home owners bought the home and called me to re-activate, so I did and signed them to a 3 year contract.

    Now they called me to come fix the phone which stopped working.  I did.   While I was there I noticed one zone not working, and I also noticed they had done some renovations, adding a second story and knocking out walls and painting the whole house. I looked for the problem for the z-6 and was not able to find the problem myself, also noticed some of the original smoke detectors are missing and painted over.

    I informed the customer of the problem and that i wanted to come back with a tech and they have not allowed me to come back and fix the missing devices and repair the damaged zones.  This is kinda a problem for me.  I want the system to operate at 100% and the customer is trying not to spend the money to repair the system I guess.

    I am considering canceling them and telling them to find monitoring service somewhere else.  What do you suggest?

    Am I liable for the system now that I know it's not working fully, or is it up to the customer to keep their system functional after construction?

    I pretty much know the answer just wanted to hear your side of this.  

I have only left phone messages have not sent letters yet.

Todd P

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Answer:

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    Sounds like you signed the new home owner to a Monitoring Contract.  I don't know if it's my Standard Form Monitoring Contract, so I don't know what your obligations are under that contract.  If it is my Monitoring Contract then all you are under contract to do is monitoring service and service the communication software if necessary; no repairs to the alarm system.

    You performed a service call, I suspect without a Service Contract.  That was a mistake.  You are permitted to "contract away liability for your own negligence" and you are more than foolish if you don't.  But you did the repair and determined that the alarm was not fully functional.  In fact, it sounds like there was renovation and expansion in the residence and much of the building is not protected.  Apparently you are still able to monitor the alarm system.

    I've reported on instances where the alarm company continued to charge for monitoring services for years where there was no phone service and no other communication at the premises.  It's the subscriber's obligation to provide telephone or equivalent service for the alarm.  You are not under any obligation to repair the alarm because you don't have a Service Contract or any other contract that imposes that duty.  However, having made a service call and having observed that the alarm system is not fully operational and in any event does not fully cover the structure [which should be apparent to the subscriber] you should notify the subscriber of the alarm system deficiencies.  This should be by letter [electronic or through mail].  It would probably be a good idea to post some notice on your invoices to this subscriber that the system is deficient.  This would also be a good time to use the Disclaimer Notice form, an acknowledgment from the subscriber that you advised of other and more security equipment and services.

    You are not required to volunteer your time or material because a subscriber doesn't want to pay for repairs or anything else that is required for the system to function properly, such as telephone service or electric service.  You notify the sub of the problem and leave it at that.  You would not be wrong in terminating the subscriber if you don't want to be associated with that kind of defective or deficient system, but you are not legally required to take that action.  In fact, with my Standard Contracts the subscriber remains responsible to continue paying you even if the alarm isn't working if it's the sub's obligation to make the repairs.

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comments on dealer program issue

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Ken:

    Smith & Wesson Security Dealer Program would like to thank you for your insightful analysis.  In response to the article, “The Good, Bad and Ugly” at Smith & Wesson we believe an alarm dealer's first consideration when considering a dealer program should be to join a dealer program with brand recognition. If the dealer can’t separate himself from the competition then a sale only comes down to “price”.

    Having a great business name and utilizing it properly separates a dealer from the rest of the pack.  The Smith & Wesson Security Program gives you the best of all worlds:

    A great recognizable name

    Business guidedance and assistance

    Award winning promotional material

    AND

    The knowledge to implement these tools:

 

    We invite our dealer to participate in sales and marketing seminars.  We provide monthly online sales training in which the dealers are asked participate.  You can have all the tools in the world to help you sell but if you don’t know how to utilize them, it all goes for naught.

    While we agree with you that alarm dealers should  keep and grow their recurring revenue, we realize sometime this is not possible or advantageous. Our Program provides optional funding for those dealers who wish to utilize it, which gives the alarm dealer the best of both worlds.

    Our dealer program is not for everyone. Before NationWide Digital Monitoring signed the contract with Smith & Wesson to be its exclusive licensee for its brand in the security industry, Nationwide Digital was vetted to make sure it had the knowledge, support structure and finances to implement this program ……. We simply ask of the dealers who want to join the Smith & Wesson Program the same. We vet our dealers to make sure they have the credentials and knowledge to prosper in this arena.

    Those dealers who join our program get all the support they need to succeed.  If they think that just having our logo will make the phone ring they are wrong and they will fail.  They still need to be proactive in marketing and sales to succeed.   With the powerful name of Smith & Wesson Security it certainly makes it easier to get you in the door.

Thank again for your news letter and support for the alarm industry.

Howard Avin

Vice President Sales & Marketing

Smith&Wesson Security Services

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Hi Ken,

        First of all, I am neither affiliated with Broadview or ADT. Many of the dealers who feel they have been betrayed by Broadview need to realize that what was done TO them is no different than what they DO to many of their customers. How many customers think they are signing a contract with a local alarm company only to be immediately passed off to a national company? Dealer programs can be a great thing, I have been involved in one for years, but the fact is Broadview sold their contracts just like we do. I disagree with the way Broadview handled this, but it should make us realize how some of our customers feel when they sign up with "Mom and Pop Security" and essentially end up with "Wal-Mart Security". We can all laugh about it in a few years at the company picnic when we ALL work for ADT.

Thanks,

Brad

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Ken

     Thank you for posting this.  JD is on the exact same page as we are.  Could you forward our email (or supply his/hers)?  I would love to talk to this person!!

Clancy Cheek

clancycheek@yahoo.com

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to OP from New Jersey:

    You would have to prove that the people you were dealing with had knowledge that the company they were with was being acquired.  The probably didn't. Knowledge of being bought or sold is kept at the highest levels of a company. And, like your monitoring contracts, your dealership contract probably had an assignment (or similar) clause.

    Don't be a dealer. Build your own company and reputation. Get a credit facility set up and sell $99 systems for 2-3 years to establish a base of RMR. Then you can back off and sell full price systems if you want or stay with selling the subsidized systems. You'll gain wealth and equity and have something to sell when you retire or something to pass to your kids. At the very least, if you stay a dealer, put 30-50% of what you're paid on each contract sold into the bank, 401(k), etc.

Best wishes:

David Myers

Myers Protection Services

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Ken,

    Why not get a "class action" suit together for these fine folk.  They can run roughshod over anyone as they choose.  They do this knowing they can buy these accounts after a few years-for cheap.  Anyone that has done business with them knows perfectly well how they get treated, and it rarely is a good working relationship.

    If you people want to be in the security business there are so many options available to you when you are ready to "throw in the towel."  The other side of this issue is every time they buy a comppany we see that the long run is the accounts go elsewhere because the customer knows they tried them and said enough is enough.  C'mon people' wake up, you know the stories, and if you don't, pay attention to those hairs on the back of your neck telling you something.  Join the associations, go to the educational classes to talk to your peers.  Go to the ISC's.  Join ASIS, but keep your business to yourself.

Marty Winger

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Hi Ken

    Thank you for maintaining this forum and sharing with the industry.  Your Dealer Program review was very insightful.  I have over 30 years in the alarm business, with about half in the Dealer Program space in one form or another. Your selection of Smith and Wesson and Central Security Group is an excellent pairing to understand the options available to Dealers today.  SW offers an excellent branded marketing package including exclusive equipment  packages and central station monitoring, all of which is designed to help the dealer increase his overall volume of business with profitability growth that exceeds the additional overhead.  CSG, who will purchase new accounts as they are created by the dealer for an agreed market price, appeals to the dealer who wants to build significant cash flow and profitability today rather than build equity which he would plan to sell sometime in the future.  SW does not supply capital, but CSG does via purchase of the newly created accounts.  If capital is available to the dealer or his market allows him to install new systems at a profit then the dealer can expand his business via SW without selling (or borrowing) against his new accounts.  Competing against those companies and Dealer Programs who have substantial capital is very difficult to do without your own capital so many Dealers have chosen to work with well capitalized and ethical companies like CSG.  In either case new companies must have capital to sustain themselves so there is a real need for both types of companies in the industry.  There are many other factors to review as a dealer considers which way to take his business, but his first step is to analyze his capital requirements and his market.  Navigating this process can be very difficult and confusing, but there are some good solutions out there if anyone wishes to contact me.

Tony

R. Anthony Smith

Security Finance Associates www.securityfinance.com