Two Largest Alarm Door Knockers Settle Consumer Complaints with State for over $1 Million

Two alarm service companies, Vivint and Pinnacle, will change their business practices, pay fines and cancel more than $1 million of customer debt as a punishment for using misleading and deceptive sales tactics on Wisconsin consumers, officials announced Thursday.  Wisconsin Attorney General J.B. Van Hollen's office said Vivint and Pinnacle Security will change their disclosure policies about charges and make it easier for customers to cancel their service. The investigations of both companies were initiated by the state Department of Agriculture, Trade and Consumer Protection after receiving complaints about each company's door-to-door sales practices.

For the record, this past summer was the worst ever for door knocker alarm salesperson complaints. “Knocker” scam reports popped up all over the US, and some of them named names – companies you have probably read about before, here and elsewhere. Millions of homeowners got an unexpected a taste of how door knocker alarm salespeople operate. And a new fraudulent tactic was added to the list: door knockers who pretended to be from your alarm company.

Details on the Punishments

Pinnacle must offer to pay more than $23,500 in refunds to consumers who were misled about their ability to cancel their alarm service contracts. Pinnacle also will cancel more than $1 million in consumer debt owed to the company and pay forfeitures and attorney’s fees to the state totaling $40,000.

In a similar, but separate, agreement, Vivint, formerly known as APX, agreed to pay refunds of up to $148,000 to consumers who were misled about their ability to cancel and about false alarm charges. Vivint will remove affected consumers from collections, canceling nearly $450,000 in consumer debt owed to the company. In addition, the company will pay forfeitures and attorney’s fees to the state totaling $65,000.

What the Door Knockers Did Wrong: Pinnacle

According to the complaints filed by the state, Pinnacle's sales agents said or implied that police or emergency personnel would respond in person to an alarm, even though it didn't employ personnel to do so. Pinnacle also misled potential customers into thinking they would get free equipment in return for allowing Pinnacle to place a yard sign outside their homes. Homeowners also said salespeople for Pinnacle induced them to sign up for alarm services by claiming it had taken over for their existing home-security companies. "Pinnacle represented expressly, or by implication, that Pinnacle and the consumers' existing home security company had a business relationship, that Pinnacle had purchased the consumers' existing home security company, or that the consumers' existing home security company was bankrupt and Pinnacle was now serving their customers," the state wrote in its complaint. In reality, Pinnacle was a competitor. The violations took place between 2007 and Aug. 10, 2010.

What the Door Knockers Did Wrong: Vivint

According to the complaints filed by the state, Vivint customers complained they were induced to sign up after sales people offered them free installation of alarm equipment as a limited-time offer that needed to be taken advantage of immediately. The company also tricked people into a signing contract they would have to pay to get out of. Sales people told potential customers that contracts could be canceled any time without penalty. The actual contract said customers had three days to cancel, but also noted that the contract is binding from installation. By installing equipment on the same day, Vivint deterred customers from canceling their contract without penalty. Customers who tried to cancel were told they would have to pay the entire contract amount to get out.

Vivint's agreement affects customers from 2006 through early September this year. As the Journal Sentinel reported in July, Vivint was the object of the largest share of complaints that the Wisconsin Better Business Bureau received about alarm companies between July 2011 and July this year.

Great Advice from the BBB (Better Business Bureau)

From a Wisconsin article last summer, here’s some great advice on what to do when you hear that knock on your door.

Before you sign up

Make sure you need the service. Get multiple bids. Know the answer to key questions: what would be your total monthly cost, all fees and charges included? How, when and at what cost can you cancel your contract?

Research the company. Check the business’ rating on the Better Business Bureau website and search the Internet to find out any problems with the company. You can also call your local police department to ask if it has had any problems with the company.

Once you sign up

Monitor what you're being charged to make sure it's in accordance with your contract. If you were overcharged, contact the company. If you charged the services to your credit (not debit) card, you can contact your credit card company within 60 days to have the charges reversed.

If the equipment never worked or is faulty, don't pay. Contact the company. If the problem's not solved, you can file a Complaint with the Better Business Bureau.

For some time I have been concerned that the aggressive tactics employed by many door knockers are not healthy for the alarm industry. Door knockers approached millions of homeowners last summer: in many cases the damage is done, and the opportunity to provide peace of mind with integrity has been clouded for other alarm companies who are transparent and consistently ethical in their behavior. Frankly, door knockers do not want consumers to do the research: it’s too easy to find the complaints, the low ratings from the BBB (“F” for Pinnacle, and “B-“ for Vivint), and even more attractive offers from other alarm companies with better reputations and service records – like FrontPoint. When you’re ready to learn why we are the nationwide leader in wireless home security, just check us out online. We make home security and home automation safer, smarter, simpler, more affordable, and virtually impossible to defeat. And best of all, you never have to answer that knock at your door.