BBB Warns Deceptive Sales Practices Will Rise This Summer
May 26, 2016
On May 25, the BBB, along with ESA and the CSAA held a live event in in which they sought to raise awareness of deceptive sales practices in the security industry, to ask Utah-based companies to self-regulate the practice, and to warn consumers of the practices.
With the summer door-knocking season set to begin Memorial Day weekend, Better Business Bureau is warning consumers about deceptive home security sales tactics. According to BBB, several Utah home security companies are responsible for most of the questionable sales practices nationwide, taking advantage of thousands of consumers every year.
“In 2015, about 600,000 consumers nationwide turned to BBB to look up information about home security companies,” said Jane Driggs, president and CEO of BBB Utah. “While we love it when they come to us for the research, they also come to us to complain. And what they complain about, far too often, is that the sales person who knocked on their door was not honest about what they were selling. Consumers feel pressured into signing before they understand that they are switching companies and increasing their costs.”
As door-to-door sales forces have increased, Driggs said the BBB is expecting a record season in regard to deceptive sales practices. In Utah alone, BBB has received 657 complaints this season already due to the growth of companies in the area. She warned that the problem is not just sales people lying, but also withholding and omitting pertinent information to make the sale.
Two industry trade associations — Electronic Security Association (ESA) and Central Station Alarm Association (CSAA) — joined BBB in calling for home security companies to stop deceptive door-to-door sales practices. ADT, ranked No. 1 on the SDM 100 and a BBB Accredited Business, co-hosted the event, which not only was live-streamed over the Internet, but was attended by local Utah news media. “I had a couple TV stations here, a newspaper and a radio station,” said Bob Tucker, director of corporate affairs for ADT.
Two consumers told their stories of being targeted with deceptive tactics of a home security company. John Meikle of Cottonwood Heights, Utah, recognized the sales person’s con almost immediately. “He said that ADT would no longer be servicing landlines and that I would need to upgrade my security system to wireless or my system would stop working. That’s when they asked to come inside. I said ‘no’ and told them that ADT had not informed me of any changes,” Miekle said. “I think it is terrible that some businesses operate this way and train their sales reps to lie, cheat and swindle consumers like me. As a Utah resident, I am embarrassed that some of the worst offenders of these unscrupulous business practices are headquartered right here in this state.”
Jacque, a Salt Lake City retiree, got an alarm system after her husband died, but a knock on the door two years ago set in motion a frustrating and costly situation. The sales representative told her that ADT had gone out of business, her system was outdated, and that it could be disabled from the outside and she would never know. “He was really pushy, aggressive and insisted that he needed to check my keypad on the wall. Regretfully, I allowed him into my home,” Jacque said. “I was worried that I was not protected. A few days later, I realized ADT was still taking monthly payments from my bank account for monitoring. The ADT representative informed me that they had not gone out of business. I think what these companies are doing is terrible. I wonder how these sales reps are able to sleep at night knowing that they are ripping off grandmothers like me.”
BBB shared tips for consumers who are considering a home security system (bbb.org/homesecurity), and also released advice to potential employees who are being recruited to spend their summers knocking on doors (bbb.org/alarmsales). “We urge those who are selling security systems to abide by the BBB Standards for Trust,” said Driggs. “Tell the truth, honor promises and embody integrity.”
Jay Hauhn, CSAA executive director, also spoke at the event. “CSAA represents independently approved monitoring stations in the alarm industry,” said Hauhn. “Our membership includes national providers as well as many members who are family-owned, multi-generation businesses, all with longstanding relationships with their customers. A big part of what we provide customers can be summed up in one word: trust. It concerns me greatly when I continually hear stories of how unsuspecting consumers are being conned and cheated by those in our industry who are not trustworthy. It’s especially angers me when they target the sick and the elderly. This predatory business model, operated by just a few bad companies out of thousands of good ones, is hurting the image of the entire industry and needs to stop now. Most companies have excellent sales reputations, like ADT which is leading a national PR campaign to educate consumers and has a strong record of aggressively pursuing legal action against businesses and sales reps who commit the fraud.”
Merlin Guilbeau, ESA executive director, said, “ESA has 2,600 member companies that represent more than 70 percent of the electronic security market. Our members employ 500,000 industry professionals who service millions of residential and commercial accounts. We are also a leader in our industry’s fight against deceptive sales. We have a code of ethical conduct that stresses carrying identification, being properly licensed, respecting the customer, being honest at all times, and representing your company and services truthfully. The ESA code of ethics is our industry’s stake in the ground. It is our expectation that ESA members will take this code seriously, continually make it part of their company’s culture and way of doing business, train all new hires to follow the guidelines and, when there is a failure, take swift action to discipline employees, including termination.
Tucker said ADT has done something like this for the past several years in partnership with the national BBB as well as ESA and CSAA at the Electronic security Expo (ESX), which typically takes place in mid-June. This year, however, they decided to have the event in May as a proactive outreach before the summer selling season began in earnest. “We also wanted to move it out from wherever ESX is held to where the heart of the problem is, and that’s here in Utah,” Tucker said.
Driggs explained there are 113 Better Business Bureaus, and of the 5,000 complaints nationally, the Utah BBB received 1,900 of them last year.
The event is having results as word gets out. The results may not be happening as quickly as some would like, but Driggs said, “I think it’s a little bit better; we’ve been pleading with companies for years about this. Every year I think the egregiousness of the tactics gets a little better, and the number of complaints that are deceptive practices we’re starting to see reduced, but not by a significant enough amount.”
Tucker said there are other companies being targeted and other companies are seeking to stem the deceptive practices, but because of ADT’s sheer volume of customers, it is by default the largest target. (See SDM’s coverage of ADT’s legal action against five dealers for deceptive sales practices at www.SDMmag.com/adt-sues-5-dealers.)