ADT, Monitronics sue door-to-door sales people, call for code of ethics

Thursday, July 23, 2009

BOCA RATON, Fla. and DALLAS—Fed up with customer complaints about lying, cheating and stealing by door-to-door salespeople, ADT and Monitronics this month have filed lawsuits against the salespeople themselves.

“We want to deliver a message loud and clear that if you’re a door-to-door salesperson who lies about your affiliation [saying you’re affiliated with ADT when you’re not, or engaging in other unscrupulous behavior], ADT is going to come after you,” said David Bleisch, chief legal officer for ADT. ADT has received complaints from 22 different states, he said.

Bleisch called for an “industry code of ethics” that would spell out guidelines for door-to-door salespeople. “We are going to talk to industry players and work with them and industry organizations to propose a code and prepare a draft,” Bleisch said. Asked if Monitronics would support the creation of a code of ethics, Mitch Clarke, Monitronics’ VP of marketing, called the idea “a positive thing.” The challenge will be “working out compliance and enforcement,” he said, but having the industry “adopt a code that sets out the right set of things to do across the board is a good idea. Good business brings good business,” he said.

ADT this month filed three separate lawsuits against door-to-door salespeople. Employees of Pinnacle Security, a summer-sales model company based in Orem, Utah, are named in two of the suits. Monitronics—which settled a lawsuit with Pinnacle involving charges of deceitful sales practices and use of insider information in 2007, what Monitronics called a “vast scheme”—filed three separate lawsuits this summer. Each of the lawsuits names more than one defendant, and all are Pinnacle Security employees.

Kelly Walker, Pinnacle president, said he was unable to comment on the pending litigation, “particularly where we are not a party to the litigation. Nevertheless, Pinnacle Security is committed to maintaining high levels of professional conduct by our independent contractors and we take any allegation of misconduct seriously.”

ADT’s Bleisch emphasized that it has not singled out Pinnacle Security, however: “This is not an ADT versus Pinnacle problem, this is a security industry problem involving any door-to-door sales person who acts unlawfully.” He said that ADT was preparing to file more lawsuits against other salespeople who were from companies other than Pinnacle Security.

Why sue salespeople and not the company they work for? “We sued the people that committed the fraud,” Bleisch said. However, he said, ADT is not discounting the possibility that the company may have been instructing the sales people in deceptive practices.

A Vision Security salesperson was named in one of the ADT lawsuits, as well. Vision Security is a summer-model sales company based in Orem, Utah. Click here for an update on Vision Security's response to the lawsuit. 

Clarke, of Monitronics, was unable to comment specifically on the Monitronics lawsuits, saying litigation is ongoing.

ADT’s Bleisch noted that ADT does not have a problem with the practice of door-to-door sales or summer-sales model security companies, per se. In fact, many ADT dealers, including some of its largest dealers, derive much of their business from door-to-door sales.

Bleisch said he hopes to have a door-knocking code of ethics in place by the spring of 2010. “It’s our belief that the legitimate summer sales dealers will want to sign on to this,” he said.