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when to bill for monitoring / audio March 20, 2018

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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when to bill for monitoring / audio
March 20, 2018
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when to bill for monitoring
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Ken
    Grateful for your services;
    Quick question.  We filled out your 
All in One Residential agreement for a customer that has 210 rental apartments.  We have installed the systems and test signals with central station however there are no rentals yet.  We are going to start billing for monitoring service.   However since there is no renter we do not have the account online with central station.   The agreement is to bill monitoring as the systems are installed.  
    Is it ok to bill even if the account is not online since there is no rental in the apartment yet ?   Or do we need to activate the account with central station even if  their is no client being monitored, no user codes in the system, no password, no emergency contact information or paper work for monitoring service with the renter at this time?
name withheld
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Response
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    Careful how you deal with your subscriber.  You don't want to end up in breach of contract.
    First of all, you probably should have used the 
Commercial All in One with this building owner.  Then, each end user - tenant has to sign a Residential All in One, even though the tenant will not be paying for the monitoring service.  I assume a tenant could ask for some upgrade or something different and agree to pay for it, and that is one reason the tenant has to sign the Residential All in One. The other reason is that the tenant, though not paying for monitoring, will likely be the one to sue you if there is a loss in the apartment [for whatever you are monitoring, which I guess is intrusion - but could be temperature, humidity, cameras, audio].  
    The
 All in One agreement provides that RMR charges begin the first day of the month following execution of the contract.  In your case there are no end users yet, and therefore no alarms activated.  
    You ask if you can start charging for monitoring.  Well according to the printed provision in the contract the answer would be yes.  But, you also mention that your agreement calls for you to bill for monitoring as the systems are installed.  That is something you added in the Schedule of Equipment and Services.  Of course that makes sense [unless you installed the systems in the apartments and need to start getting paid at some point even if the owner can't find tenants].  
    So by agreement you have provided that you can bill for monitoring as systems are installed throughout the building.  That's what you should do.  You can't start billing for 210 systems are aren't installed.  You obviously can't open 210 central station accounts now; you can't open any.  
    You could have agreed in the contract that you start billing for monitoring for all 210 systems immediately, in which event you still would not have to open any central station accounts because you have no end users yet and the systems aren't activated.
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audio
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Ken,
    I really appreciate your e-mails.  Hoping you can cover a topic that is likely of interest to many of your readers.
    It is my belief that many jurisdictions have laws surrounding the recording of audio and that they normally require that at least one party to a conversation know that audio is being recorded.  The retail and security markets have been flooded with devices that offer audio recording.  One such example is video doorbells which integrate with our security systems and allow us to be alerted and speak with someone at our door.  These doorbells can be set up to be triggered by motion and record video and audio even when the button is not pressed.  People walking by on the street might trigger a recording and their conversation may be picked up.  Someone coming into my yard to deliver something could be recorded with audio and not know it.
    These products are being offered all over the place.  As a security dealer, how concerned should we be about these laws?  Is it up to us to inform the client about the law in our jurisdiction?  Do your contracts contain a clause absolving us of liability for installing such devices?  If yes, do you know when that clause was put in as we have a version from a few years back.  
Thank you,
Vivian Tannock
Departmental Coordinator / Customer Care
True Steel Security
Sudbury, ON
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Response
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    All jurisdictions have laws addressing audio - mechanical interception and recording.  And you are correct that the law is generally one or all party consent.
    The 
All in One Agreements cover audio [dating from when audio became ubiquitous - BUT THAT DOESN'T MEAN YOU DON'T NEED TO UPDATE YOUR CONTRACTS TODAY].  You are not responsible for how your subscriber uses the equipment, unless you installed it in such a place and in such a way that it could be used no other way than illegally.  A doorbell would not meet that description.  
    Liability for misuse of audio is going to involve how the audio is collected and how it's used.  Collecting it and not using it is not likely to cause liability; it's a theoretical discussion.  Misusing audio, even if collected legally, is going to cause liability and damages.
    You mention that the doorbell picks up people walking on the sidewalk.  If that's true, then you should not be listening, and you certainly should not try to use the audio in any way.  But if someone presses your doorbell and you talk to them do you violate any law?  Maybe.  How?  If you're in an all party state you can't record the conversation.  But even if you're in a one party state, or even if the person consents to the recording, you still can't use the recording for unintended purposes.   You can't use it commercially - can't put it on your website for advertising purposes.  You can't use it to blackmail someone.  
    Collecting data and using that data go hand in hand.  Generally before you can be liable you need to be "liable" and there needs to be some damages.  
    Here's an idea for a class action suit.  One of the communication giants announces on its calls that it records conversations for "training purposes or assure customer service or some other BS".  If those calls are in fact listened to, sorted and information sold for commercial purposes there could be liability.  Liability because the announcement does not, in my opinion, constitute consent to the recording, and damages if you can show that the data was used in way to target consumers to sell them a bunch of useless products and services [I haven't given this a lot of thought].  Anyway, if you like the idea feel free to pass it along to one of my vulture attorney colleagues in the class action business.
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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com