Guess who's more popular, the alarm industry or lawyers?

Thursday, September 17, 2009

ALEXANDRIA, Va.—As of numbers released for 2008, consumers are more likely to complain about alarm companies than about lawyers, according to statistics from the Better Business Bureau. And there is some evidence that door-knocking sales may be responsible for a rise in those customer complaints about alarm companies.

The news for the alarm industry is not all bad, however. Despite the increase in the number of complaints, the industry is getting better at resolving those complaints, according to BBB statistics.

The total number of complaints for 2009 will not be available until February 2010, however, so far in 2009, “four or five” individual BBB offices have issued alerts warning about unethical sales practices of door-to-door alarm salespeople, according to Allison Southwark, media relations manager for BBB. Those alerts were then picked up and reissued by “dozens of other Better Business Bureau offices who issued them in their markets.”

In 2008, the BBB received a total of 2,025 complaints about alarm companies. Of the 3,900 industries tracked by the BBB, alarm companies were the 93rd highest in terms of complaints. Ranking 94th were lawyers, about whom the BBB received 1,993 complaints. Alarm companies complaints in 2008 jumped 68 percent over 2007, when the BBB received 1,194 complaints. In 2007, the industry ranked 134th highest in terms of complaints.

So, are summer-sales model door-knocking companies responsible for the increase number in complaints? It is difficult to determine before all of the numbers are in for 2009. However, if you take a look at the BBB reliability reports for the headquarters of several large companies, a larger percentage of complaints (resolved in the past 12 months) had to do with “sales practices” if the company is a summer sales model company. For example only 8 percent of complaints resolved by Protection One in the past twelve months had to do with sales practices. Similarly, 7 percent of complaints resolved by Broadview Security (formerly Brink’s Home Security) were related to sales practices. The percentage of complaints generated by sales tactics for three of the major summer-model companies is much higher: ApxAlarm is at 30 percent, Pinnacle Security at 30 percent, and Platinum Protection is at 29 percent.

Jane Driggs, president of BBB of Utah, said that the number of complaints about the sales practices of summer-model companies has increased each year in the past four years. However, the number of systems sold and sales people on the streets has increased each year as well.

Driggs said the companies have “been more than willing to work with us to resolve the complaints,” but she believes, they “really need to examine their model closely or their sales model is going to go away; cities are not going to want to license them.” While the companies have made strides in putting controls in place, she believes more controls are necessary to reduce the number of complaints.

“I do believe it is possible to fix; there are companies that go door-to-door that don’t have a problem,” she said. She surmised that part of the problem may be that the financial incentives are so high that some sales people resort to unethical sales tactics. Successful summer-model sales people can make well over $30,000 in a summer season; top sales people can earn more than $100,000.

Driggs said that the top three companies—ApxAlarm, Platinum and Pinnacle—have all approached her to discuss how to reduce complaints: “They all came to us. We take that as a really good sign that they care, that they want to figure this out.”