Security Business

MAR 2019

Find news and information for the executive corporate security director, CSO, facility manager and assets protection manager on issues of policy, products, incidents, risk management, threat assessments and preparedness.

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22 Security Business / / March 2019 Legal Ramifications of Customer Theft Dishonest sales practices hurt the customer, hurt alarm companies and hurt the industry Legal Brief BY TIMOTHY J. PASTORE, ESQ. M rs. Smith, home early from work, settled into her favorite chair. Aer a few minutes, she heard a knock at the front door. Because there had been some recent (unsolved) burglaries in the neighbor- hood, she first peered through the small window of her front door. ere stood a man – he held a clipboard and wore a white hat and shirt each emblazoned with a colorful logo "Security 123." Mrs. Smith disarmed her alarm sys- tem and slowly – cautiously – opened the door. She reluctantly greeted the man. He smiled in response, attempting to put her at ease. "Are you Mrs. Smith," the man asked. "Yes," she replied (still hesitant). "My name is Bob Johnson. I am with Security 123. Here is my identification card." e man showed Mrs. Smith his card, which appeared legitimate and gave her further comfort. "Ma'am, I know your security sys- tem was protected and monitored by Security ABC." at is right, Mrs. Smith thought. "ey were a fine company, but they are now out of business," he said. "I am sorry to report that Security ABC had financial trouble and they are no longer monitoring your alarm system." Mrs. Smith's mind raced. Out of busi- ness? Who will protect my home and my belongings? What about those burglar- ies? What will I do now? How much will it cost to get a new alarm company? Will I have to pay for all new equipment? "Don't worry Mrs. Smith," the man assured her, as if reading her mind. "I have great news. Security 123 bought Security ABC and agreed to take over its accounts. We will be monitoring all of Security ABC's alarm accounts – including yours – without interruption and with no additional charge to you." "You just have to sign this new con- tract with our company and let me connect your alarm panel to our central station," he continued. "It will take less than five minutes and you will be all set. No interruption of service." Mrs. Smith breathed a sigh of relief. ank goodness for this nice young man and his company, she thought. How fortunate that someone will still be monitoring my alarm system and alert- ing the police or fire department if I have any problems. "Please come in," Mrs. Smith offered. e man entered, placed his clipboard on the nearby kitchen table, and asked Mrs. Smith where the alarm panel was located. She directed him to the base- ment and led him there. As promised, in just a few minutes, the man was done. He redirected the alarm system to a new phone number belonging to his company. He gave Mrs. Smith some accompanying paperwork about Security 123 and asked for her signature and some additional infor- mation (credit card data, etc.) on what he described as a form contract (which he told her was "for her protection" and just something "lawyers make him do"). Mrs. Smith provided the information and otherwise signed the form contract without reading it – happy that her alarm system would continue to work. e man thanked Mrs. Smith for her time, assured her that his company would do everything possible to keep her safe, and he departed Mrs. Smith's home with a smile. Unraveling the Customer Theft Scam is scenario is a fictionalized version of real events – including a series of cases of customer the that I prose- cuted on behalf of my corporate clients. As you may have guessed, Mrs. Smith's alarm company, Security ABC, was not out of business; rather, it was an active competitor to Security 123. Bob Johnson of Security 123 lied to Mrs. Smith with the intention of steal- ing her account, signing her to a multi- year monitoring agreement, and com- mitting her to make automated credit card payments to Security 123 for the term of the new agreement. Meanwhile, Mrs. Smith was still under contract with Security ABC, with two years le on the term of that agreement. Questions abound: Is Mrs. Smith bound in contract to two compa- nies? Can she escape the Security 123 © Istock

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