ADT sues The Alarm Company, Security Networks

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Thursday, March 25, 2010

BOCA RATON, Fla.—ADT yesterday announced it has filed a lawsuit against The Alarm Company of Memphis, Tenn., and Security Networks of West Palm Beach, Fla.

The suit was filed against Tom Brady, Susan Brady and Lance Woods of The Alarm Company. Security Networks, a well-established super-regional alarm company, “was named in the lawsuit because the customer contract has Security Networks’ name on it,“ said David Bleisch, ADT general counsel told Security Systems News.

“If it turns out that Security Networks was not complicit in the deceptive practices, then ADT will drop them from the lawsuit,” he added.

The suit alleges that Woods in December 2009 posed as an ADT employee to coerce 95-year-old Alice Johnson of Knoxville, Tenn., into switching out her ADT system and signing a contract with Security Networks. Woods allegedly told Johnson that the upgrade was necessary because there had been recent violent crime in her neighborhood.

Rich Perry, Security Networks CEO told Security Systems News he had just learned of the lawsuit yesterday morning, so could not comment on the specifics.

He confirmed that The Alarm Company is a Security Networks dealer. “We have 200 Affiliate companies, they are one,” Perry said.

Perry said his legal counsel was researching the lawsuit and noted that Security Networks hadn’t had time to determine for certain that the customer in question is monitored by Security Networks. Perry noted that two instances were brought to light in recent weeks of The Alarm Company customers who were unhappy that they were converted from ADT to Security Networks.

He characterized these as isolated instances and said “we took immediate action, we cancelled the contract and paid to covert them back to ADT.”

“We took all the steps you’d expect us to take in those cases,” he said, “and we will in this case, if we discover that this is a customer whom we monitor ... We do not condone deceptive sales practices, in fact we’re leading the charge to stamp this out.”

Security Networks takes a number of steps, such as requiring its affiliates’ sales reps to enter into non-solicitation agreements, to prevent these instances.

ADT has taken previous legal action against Tom and Susan Brady for unlawful and unethical actions, ADT said. ADT said that the Mid-South Better Business Bureau “has logged dozens of complaints against the Bradys and their businesses, giving them an ‘F’ rating.”

“The Alarm Company has had a very poor record over the past several years,” said Randy Hutchinson, president of the Mid-South BBB in Memphis, in a prepared statement. “The complainants are often the children or caregivers of elderly homeowners who allege that The Alarm Company salespeople knock on their doors and make up stories to pressure them into buying something they don’t want or need.”

Last summer, ADT took legal action against a number of individual salespeople they said were using deceptive sales practices. This is the first time ADT has publicly announced legal action against a monitoring operation who did not originate the contract in question.

Perry said he believes alarm companies should work together to rid the industry of deceptive sales tactics. “It’s a threat to all of us,” he said.