California companies face alarm verification woes

Thursday, August 23, 2007

FONTANA, Calif.-The chief of police has warned alarm and monitoring companies they will be held responsible for verifying the legitimacy of alarms prior to notifying police when the city implements a verified response policy October 1.
Monitoring companies in this area are now deciding how to add verification methods to their existing accounts in order to comply with this new policy, according to Morgan Hertel, vice president of the Command Center, a contract central station in Corono, California.
"The next step for the alarm association is to reach out to subscribers through the dealers and say: 'This is the situation. This is the cost involved in verifying alarms. What do you want to do?'" he said.
Complying with this new policy could prove costly to both alarm companies and end users. "For the average small commercial account that wants to add video verification, it could easily be $2,500 or more to get started. Audio would be less and guard response is a whole other issue," he said. "This area has not traditionally been served by guard response in the past, so now we have to find vendors willing to come into that area and take that on. Comparative to other areas, it could be a $40 to $50 additional fee."
In addition, alarm companies are concerned about subscribers' reaction to costs associated with the new policy. "From the central station point of view, we can handle the technology, [adding audio or video] or arrangement for private response, but whether or not the end user will want to arbitrarily pay for that is unknown," Hertel said.
Hertel has faced the verification response issue before, when the city of Modesto, Calif., issued a similar response verification policy in November 2006. "It was a scramble to get private response in place. And that was the ultimate long-term solution there: Subscribers would rather pay monthly fees to have a private responder show up than take a big hit for video verification," he said.
On Oct. 1, the city of Fontana will join fewer than 30 law enforcement agencies, out of 18,000 in the country, that have adopted similar policies, says Ron Walters, director of field operations for the Security Industry Alarm Coalition.
"We've not had the predicted mass exodus of police departments not responding to burglar alarms," said Walters. "Part of the reason is because the industry has achieved instances of 80 percent reduction [in false alarms] and some municipalities have actually created more revenue through registration and fines than the cost of responding to the alarms."
Alarm companies faced with implementing verification methods are understandably concerned about the impact this policy may have on their business. "What happens is that more new business doesn't occur rather than losing the old business," he said. "There's certainly an immediate period of time when it's at its highest publicity that people aren't thronging to buy alarm systems."
In Walter's experience, "what we've actually found out is that none of the alarm companies have gone out of business, but a ton of guard companies have. There's not always sufficient revenue for the guard companies to make a living at it."
Alarm companies faced with implementing verification methods must adapt their business accordingly, and quickly, in the case of the October 1 deadline in Fontana. Because, as Walters pointed out, "alarms are only as effective as the response to them."