Pinnacle settles with Illinois AG
CHICAGO—The Illinois Attorney General’s office announced this week that it had settled an October 2009 lawsuit against summer sales model company Pinnacle Security.
The lawsuit charged that Pinnacle door-to-door salespeople targeted customers of competitors, particularly ADT customers, and used deceptive sales tactics to switch customers from ADT to Pinnacle.
“Many Illinois homeowners who signed up for home security products as a result of Pinnacle's false claims were stuck paying for services they didn't need,” said Illinois Attorney General Lisa Madigan in a statement. “This agreement is intended to put an end to those fraudulent sales practices, require the company to police its sales force more closely and provide some relief for customers.”
Under the settlement, Pinnacle has agreed to pay restitution to eligible Illinois consumers who entered into security contracts as the result of deceptive sales tactics.
Additionally, Pinnacle has agreed to ensure that its sales people accurately represent for whom they work, the service terms of a contract, and any termination fees they may be liable for if they currently have a contract with another home security company. Pinnacle also agreed to not pay commission to sales personnel who obtain contracts through fraudulent tactics.
Pinnacle COO Steve Hafen said his company “worked closely with the Illinois Attorney General’s Office to investigate, identify and eliminate instances where individuals acted outside of our established code of conduct.” He emphasized that the settlement is specific to certain personnel and there was “no overarching issue with our products or services.”
In addition, he noted that Pinnacle has, over the past several months “implemented sweeping changes in compliance and protocol that address the areas of personnel, training and detection and enforcement which continue to be implemented nationwide, including in Illinois, and are resolving current issues and dramatically reducing the potential for further incidents.”
Hafen said Pinnacle believes its internal initiatives “will create a new industry standard that will be proven out over time.” Further, he said that Pinnacle Security “would not tolerate individuals that behave outside of our code of conduct.”
Pinnacle’s has created new ways to get feedback directly from its customers to improve service. “One of several initiatives we have recently implemented is a customer service survey to better gauge ongoing levels of satisfaction,” Hafen said. While all complaints are taken seriously, Hafen pointed out that the number of complaints is a small percentage of Pinnacle customers: “The new protocols and compliance initiatives were created to resolve issues representing less than 0.5 percent of our growing clientele. We are not comfortable with any level of dissatisfaction.”