ADT Settles With 3 Security Companies in Deceptive Sales Lawsuits for $5.5 Million
ADT, a provider of security and automation solutions for homes and businesses and ranked No. 1 on the SDM 100, announced settlements with Alder, its owner, Adam Schanz, and two Monitronics dealers — Alliance Security and Capital Connect — as part of lawsuits against those three companies and Schanz alleging the use of deceptive sales practices to mislead ADT customers.
The agreements call for ADT to receive $3 million from Alder, $1.5 million from Alliance Security and $1 million from Capital Connect, for a total of $5.5 million and court orders prohibiting each company from further deceptive sales practices.
The settlement comes on the heels of SAFE Security successfully suing Alder for deceptive practices in March, 2017.
“We hope these settlements once again show that ADT greatly believes in protecting its customers from deceptive sales practices,” said P. Gray Finney, ADT chief legal officer. “ADT will continue to pursue companies and their sales representatives who misrepresent themselves to deceive its customers.”
The settlements stem from two lawsuits in which ADT claimed sales representatives from Alder, Alliance Security and Capital Connect misled ADT customers into believing their companies were affiliated with ADT, or their alarm systems required upgrading. The lawsuits were filed after hundreds of ADT customers complained about the deceptive sales practices of these three companies, ADT reported in a press release.
Since 2013, ADT has filed numerous lawsuits against companies it alleges have made false or misleading statements to ADT customers when attempting to solicit their business and obtained court orders prohibiting those companies from further deceptive sales practices, along with monetary relief.
Alder, however, expressed confidence in its defense, alleging in a statement to SDM, “ADT regularly uses these litigation tactics to stifle competition,” and added that “settling the case at this time is in [Alder's] best interests.” Alder also said, "The settlement brings to a close the uncertainty and ongoing expense of litigation."
Adam Schanz, CEO of Alder, said, “Alder is pleased to have resolved both legal matters with ADT. ... The resolution of these two legal matters enables us to place our resources and focus where it belongs, which is providing world class products and superior service to our customers.”
ADT encourages anyone with questions about sales scams in the security industry, or to report being a victim, to click here.
To read about ADT and the Better Business Bureau partnering to raise awareness of deceptive sales practices in the industry, visit www.sdmmag.com/articles/93913-bbb-adt-trade-associations-help-consumers-fight-deceptive-door-to-door-alarm-sales.
To read about the issue being covered on Inside Edition, visit www.sdmmag.com/articles/92873-deceptive-sales-practices-to-be-highlighted-on-inside-edition-tonight.