Today, ADT, a provider of monitored security and interactive home and business automation solutions in the United States and Canada ranked No. 1 on the SDM 100, announced it settled a deceptive sales practices lawsuit filed against NorthStar Alarm Services, a Utah-based company ranked No. 18 on the SDM 100, for $3 million. As part of the settlement, NorthStar agreed to a $5 million consent judgment if the company defaults on paying the $3 million settlement.
As part of its case, ADT provided evidence from at least 500 customers stating they were victims of deceptive sales tactics from NorthStar employees over the past five years.
This latest legal accomplishment comes less than two months after a South Florida jury awarded ADT $4 million in damages, including $1 million in punitive damages, in a similar deceptive sales lawsuit against Alder Holdings, another security company headquartered in Utah.
“Companies that rely on deceptive sales tactics in order to compete damage the reputation and integrity of our industry,” said David Smail, ADT executive vice president and chief legal officer. “As a trusted leader, ADT is committed to stopping fraud at the front door by continuing to pursue legal action against those companies in our industry that intentionally mislead consumers.”
Over the years, ADT has sued and prevailed against several security companies that follow deceptive sales business models. Attorney generals in many states have targeted the same companies for deceptive and unfair business practices.
“We urge consumers to be on the lookout and report suspicious activity during the summer when we see an increase in fraudulent activity,” Smail said.