Coming on the heels of a $190 million jury verdict awarded against it over alleged deceptive sales tactics last month, Vivint Smart Home was sued on Wednesday by Alert 360 with similar claims.
Based in Tulsa, Okla., Alert 360 is a provider of monitored security and smart home solutions to residences across the United States. The company, ranked 5th on the 2022 SDM 100, is seeking more than $10 million in compensatory damages and punitive damages in a lawsuit filed in Oklahoma.
According to the complaint, Alert 360 is also seeking compensation based on an accounting of Vivint’s profits resulting from its deceptive practices; attorneys’ fees, costs, pre-judgment interest and post judgment interest incurred; and further relief as deemed appropriate by the court.
The complaint summarizes a laundry list of alleged “false and misleading sales practices on the doorsteps and in the homes of hundreds — if not thousands — of Alert 360 customers across the country.”
Utilizing “well-rehearsed sales tactics,” Alert 360 claims that Vivint’s sales representatives have misled its customers into believing:
- Alert 360 has gone out of business;
- Alert 360 is in bankruptcy;
- Vivint is the manufacturer of Alert 360’s equipment;
- Alert 360 changed its name to Vivint;
- Vivint has come to upgrade Alert 360 customers’ alarm keypads;
- Vivint purchased Alert 360, so the alarm signals will no longer go to the police if the customer does not replace the equipment.
“These affiliation misrepresentations allow Vivint to freeride on the goodwill of Alert 360, damage Alert 360’s name, and lead Alert 360’s customers to do business with Vivint under false pretenses, typically resulting in the Alert 360 customer becoming bound into a multi-year contract with Vivint, valued in the thousands of dollars, that is impossible for the customer to extricate himself or herself from once the customer has finally become aware of Vivint’s deception,” the complaint states.
The practices violate the Lanham Act and constitute common law trademark infringement, among other violations, according to Alert 360. The litigation comes as some investors and analysts were concerned that CPI Security’s recent court victory against Vivint, which agreed to sell itself to NRG Energy in December, may cause NRG to seek a price cut or try to terminate the deal.
However, on Wednesday NRG said it intends to use proceeds from a $740 million notes offering to partially fund the purchase of Vivint.
ADT also has a similar lawsuit to the CPI Security case against Vivint that was filed in federal court in Miami in 2020. Vivint previously settled a similar lawsuit with ADT, agreeing to pay $10 million to ADT in 2017 in exchange for a release and non-admission of liability.