CPI Security Wins $190M in Deceptive Sales Suit Against Vivint

CPI Security CEO and Founder Ken Gill makes a statement following a federal jury's unanimous decision in favor of his company's suit against Vivint Smart Home. IMAGE COURTESY OF CPI SECURITY

A federal jury in North Carolina on Friday delivered a $189.7 million verdict against Vivint Smart Home, concluding with CPI Security Systems on claims that the Provo, Utah-based company duped homeowners into switching security providers.

Charlotte, N.C.-based CPI Security sued Vivint in 2020, claiming it used deceptive sales tactics to steal customers away. A jury delivered its unanimous decision following an eight-day trial in the U.S. District Court Western District of North Carolina Charlotte Division (No. 3:20-cv-00504).

The eight-member panel found Vivint sales representatives unlawfully deceived CPI customers into signing contracts with Vivint by falsely claiming that Vivint had acquired CPI. CPI said its customers would then unknowingly sign "high-priced, multi-year" contracts that Vivint made "impossible for customers to cancel."

Vivint denied the allegations. It told the court it competed fairly with CPI and that CPI customers had switched to Vivint for legitimate reasons.

“While we’re thrilled the trial ended in our favor, I want to be clear that this case is not just about CPI’s business,” CPI Security CEO and Founder Ken Gill said in a statement posted on the company’s website. “We believe for at least 15 years, Vivint has been taking advantage of vulnerable people across the country through deceptive, misleading, and flat-out false practices. I hope today’s verdict will stop their deception for good.”

The jury’s verdict sheet listed various violations, along with the following damages awarded to CPI:

$140 million for punitive damages
$29.3 million for violations of the North Carolina Unfair and Deceptive Trade Practices Act
$13.5 million for unfair competition
$5.4 million for trademark violations
$1.5 million for interfering with the contracts of seven identified CPI customers.

The lawsuit took more than two years to reach a jury. The panel began deliberations Thursday and delivered their verdict to U.S. District Judge Frank Whitney on Friday.

A Vivint spokesperson said the company would appeal the decision and that the damages were "completely disconnected from the total economic impact of any activity that CPI claims to have occurred," Reuters reported.

Vivint has previously run afoul of rival security companies and the government. In May 2021, it agreed to pay $20 million to settle a federal investigation into the company’s alleged violations of the Fair Credit Reporting Act.

In January 2021, the Department of Justice fined Vivint $3.2 million for making false statements to secure financing for customers’ purchase of Vivint products. In 2018, Vivint agreed to pay $10 million to ADT to settle claims very similar to what CPI would file two years later.

Rodney Bosch joined the SDM editorial team in May 2022. He has been covering all facets of the electronic security industry as a trade journalist since 2006. As SDM Senior Editor, Bosch writes exclusive cover stories, such as SDM’s State of the Market series, as well as other feature-length articles. He also heads up the news section for both the emagazine and the website; and manages the annual Monitoring Today and Video Monitoring Today supplements.

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