New door-knocking scams prompt ethics code revisions

ESA revises its code of standards to specifically prohibit posing as a ‘preferred monitoring company’ for alarm manufacturer
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Wednesday, June 25, 2014

NASHVILLE—ADT says unscrupulous door-to-door sales reps have some new scams and the Electronic Security Association has updated its code of ethics to specifically ban them.

“One of the new ones is people knocking on the door and [falsely] saying they’re either from GE or from Honeywell and that they make the equipment [the customer has] and they now have a new preferred monitoring company,” David Bleisch, ADT general counsel, told Security Systems News.

Then the unethical sales reps tell the customer that the manufacturer’s preferred company is not the customer’s current security provider, but instead the company the sales reps actually work for, Bleisch explained.

ADT on June 24 held a press conference about such deceptive door-to-door sales practices. The event took place at the Electronic Security Expo being held here this week, and participants included representatives from law enforcement, the Central Station Alarm Association and ESA. They all spoke about the need to combat the problem, which ADT says is on the increase. ESX is owned and operated by the CSAA and ESA.

ESA just updated its industry Code of Ethics and Standards of Conduct this month to add specific language banning the latest scams. For example, the document now lists as among deceptive or unlawful business practices having a sales rep falsely say that “the manufacturer or provider of the existing alarm system in the consumer’s home prefers or recommends that the consumer switch to or use a specific or different alarm monitoring service.”

Bleisch, who spoke to SSN by phone after the press conference, applauded that change and others. “That’s now specifically talked about in the code, as well as some other scams,” he said.

Florida-based home security giant ADT for some years now has been working to combat door-knocking scams, by doing such things as suing alleged scammers in court and calling for an industry code of ethics, which ESA instituted in 2010.

ADT recently stepped up its efforts by announcing in May that it would offer up to $25,000 to anyone willing to blow the whistle on security companies that train their door-to-door sales teams to use deceptive sales techniques.

The offer, good until Aug. 31, specifies that any evidence whistleblowers provide must result in a successful civil judgment against the offending company before any reward is paid. The whistle blowers will receive $25,000 or 25 percent of the award ADT wins, whichever is less.

The company is specifically seeking lawfully obtained video evidence of such training. Bleisch told SSN this week that the company has had “a lot of inquiries” since announcing the reward.

“We don’t have a new definitive video yet but we’ve been contacted by people who say they have them,” Bleisch said. He added, “The good news is that we’re getting a lot of response and hopefully I think as the summer [selling season] goes on and some of the people who get hired by these companies become disillusioned, … we’ll see more people step forward.”

Speakers at the press conference at ESX included a representative from the Tennessee Office of the Attorney General, who Bleisch said talked about the scamming complaints the office is receiving and how it plans to combat them in court.

Pam Petrow, president and CEO of Pittsburgh-based Vector Security, spoke on behalf of the CSAA about how such scammers negatively impact the entire security industry, Bleisch said.

ADT showed a video clip that it contends depicts a sales manager from Utah-based Vision Security training employees to deceive customers. ADT currently is suing Vision—which denies any wrongdoing on the part of the company—in federal court.

He said ADT chose to hold the press conference at ESX to publicize the scamming issue and underline that such unethical practices affect all security companies, not just big ones like ADT.

“We think almost every company in this industry acts with integrity and is trustworthy,” Bleisch said. “There are just a few bad apples, and we think the more people that know these activities are going on, they’ll join in the effort to stop the bad actors from doing what they’re doing and protect the integrity of the industry as a whole.”