Minn. AG sues AMP Alarm over 'bait-and-switch tactics'

AMP CEO 'categorically denies the unfounded allegations'
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Thursday, May 20, 2010

OREM, Utah—AMP Alarm CEO Allen Bolen told Security Systems News this week allegations of unethical sales tactics levied in a lawsuit by the Minnesota Attorney General are false. The lawsuit took the summer sales-model company by surprise, AMP’s outside legal counsel Hal Reiser said, because AMP had resolved any known concerns in Minnesota and the AG failed to respond to numerous information requests from the summer-model company before filing the lawsuit.

“AMP alarm categorically denies the unfounded allegations made by the Minnesota Attorney General and will vigorously defend against those accusations,” Bolen said in a comment prepared for Security Systems News. “Despite AMP Alarm’s repeated and specific requests since last fall to the Minnesota Attorney General’s office, the Attorney General [did not provide names of customers or other information] prior to filing its lawsuit.”

The lawsuit, filed May 11 by Minnesota AG Lori Swanson, alleges that AMP targeted elderly residents and used high-pressure “bait-and-switch tactics.”

“In some cases, AMP falsely told consumers it was affiliated with their current alarm company or that its alarm systems were free, without disclosing ... long-term monitoring contracts.”

The lawsuit says AMP Alarm salespeople failed to inform consumers of cancellation policies, showed up at homes late at night, walked into homes without invitation, refused to leave until the homeowner signed a contract, and otherwise intimidated consumers.

“Senior citizens often fear for their personal safety at home ... Some companies exploit these safety concerns by using high pressure sales tactics to deceptively peddle costly products,” Swanson said in a statement.

Bolen said that the lawsuit refers to “five unidentified AMP customers out of nearly 5,000 Minnesota customers.” AMP made “repeated and specific requests since last fall” to the AG asking for information about consumer complaints. The AG provided information about two customers, Bolen said. “AMP immediately and successfully resolved the complaints of those two customers. Other than those two customers, the AG had not provided written complaints ... or any other information to AMP Alarm concerning its allegations ... prior to filing its lawsuit.”

Reiser said in an interview that AMP had been able to identify two additional customers with concerns in recent days, and it had resolved those concerns. “Sometimes, it’s as simple as explaining how to use the security systems,” Reiser said.

“I don’t think there’s any customer service issue AMP can’t resolve,” Reiser said. “Give us the information and we’ll resolve it promptly and in good faith.”

Bolen said that AMP informs all of its customers about cancellation policies; all AMP customers are “repeatedly well-informed” about contract services and prices. In addition, before, during and after the sale, all customers have “at least four separate opportunities for the customer to discuss and understand the contract and alarm monitoring services provided by AMP Alarm.”

“AMP alarm has never targeted the elderly or any other particular demographic in its marketing. The average age of an AMP Alarm customer in Minnesota is 52 and the average age for all AMP Alarm customers is 51,” Bolen said. AMP sells across the nation without demographic information about any potential customer, he said. The company sells to homeowners who need and want 24-hour monitoring protection. “All homeowners, irrespective of age, are vulnerable to fire, assault and burglary and ever-increasing threats to life and property,” he said.

Reiser said he was confident that AMP would be able to resolve the lawsuit. He said AMP counsel in Minnesota was in discussions with the AG about “assurances of future and ongoing compliance ... we don’t want any dissatisfied customers.”