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ADT sued over early termination fees

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Wednesday, March 6, 2013

Early termination fees are pretty much standard in the security industry but now The ADT Corp. is facing a lawsuit over them, I’ve learned.

Earlier this week two law firms announced the filing of a class action lawsuit in federal court in California on behalf of ADT Home Monitoring Services customers regarding early termination fees, also termed early cancellation fees.

The law offices of Bursor & Fisher and of Jana Eisinger contend in a news release that the fees are illegal and the “lynchpin of ADT's ‘never let them go’ strategy.”

The attorneys are urging consumers who believe they were wronged to contact them.

Here’s more from the March 4 release:
 

The proposed class consists of two groups of consumers: (1) all current or former consumer subscribers of ADT who have been charged an early termination fee or are subject to being charged an early termination fee (also called an Early Termination Fee or Early Cancellation Fee, collectively "ETF", and comprising the "ETF class"); and (2) all current or former consumer subscribers of ADT whose rates were increased or are subject to increase by ADT without prior notice while in the initial contract period or during subsequent contractual extensions.

This class action is intended to redress ADT's wrongful practice of imposing early termination fees, the lynchpin of ADT's "never let them go" strategy. Early termination fees are unlawful penalties used simply as an anti-competitive device and do not compensate ADT for any true costs of breach. These penalties, which are unilaterally imposed by ADT - even when ADT fails to perform the services promised - also violate the consumer protection statutes of California and Illinois and similar laws nationwide.

The early termination penalty is extracted under circumstances which cannot be justified, when ADT has failed to perform the very services that form the basis of ADT's obligation. The penalty is also extracted from customers who contracted with ADT to simply monitor a system that was previously installed, requiring no equipment to be installed and resulting in a windfall to ADT upon termination. By charging the early termination fee ADT gets paid for years of monitoring without doing any monitoring to earn those fees.

In addition, Plaintiffs seek redress for ADT's pattern of unilaterally increasing alarm monitoring fees while consumers are under contract for lesser fees. These increases are implemented without adequate prior notice and without providing the appropriate and required disclosures necessary to ensure that customers consent to these increases in advance. ADT relies on small boilerplate text neither signed nor highlighted for customers to claim its "right" to unilaterally increase fees.

I contacted ADT and Sarah Cohn, ADT director of media relations, who responded that the company has a policy of not commenting on pending litigation. She noted however, that “termination fees are common in the industry when a company absorbs the upfront cost of the installation.”

I’ve also reached out to the lawyers involved to find out why they’re targeting ADT. Stay posted!

 

Systems integrator start-up in Mass.

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Wednesday, March 6, 2013

A new systems integration company has opened its doors in Burlington, Mass. A2 Systems, founded by security industry veterans Pat Connors and Matt Leonard, opened its doors after the first of the year and just completed its first job for an energy company. It’s now delving into two more jobs—one in the pharmaceutical vertical and one in retail.

Connors, who is in charge of operations, and Leonard, who does sales and marketing, previously worked for Massachusetts-based Team AVS. They left there last spring and began planning to launch A2 Systems.

“We took the time to research different products,” Connors said.

A2 Systems does access control, video, intrusion, fire alarm, intercom and emergency call boxes. Its mantra is “Keep it simple and extreme customer service,” Leonard said. A2 will offer Red Cloud, Honeywell, Exacq Technologies, and Axis Communications products among others.

Its first job was an IP-based surveillance system at a solar farm in Massachusetts. “Each panel is about five feet by eight feet and there are thousands of them,” Connors said.

The solar farm is owned by a national solar energy provider that is headquartered out of state. The surveillance systems allows the security officers at headquarters to keep an eye on the solar array and other electronic systems at the 40-acre Massachusetts location.

It's already come in handy. “The solar array feeds power into the grid,” Connors said. “During a recent snowstorm the system went into alarm because it wasn’t producing any electricity,” he said. The security operation at headquarters was able to view the solar array remotely and found out there was snow covering many of the panels.

A2 Systems will focus on job in Massachusetts and New Hampshire initially. “We carefully select our customers and offer a high level of customer service,” Leonard said.

The company’s business plan calls for “a good amount of growth in 2013. Connors expects to add another three to four techs by the end of the year. The company also plans to offer “Lunch and Learn” for end users this year to show them “what technology is out here and what they should use for different situations,” Connors said.

Peer into sports stars’ homes with ADT

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Friday, March 1, 2013

National Soccer Hall of Fame star Cobi Jones has a pretty cool house in California—a Spanish-style villa built in the 1920s. He also has an English bulldog named ZuZu that tends to slobber, as well as a wife and young child. I know all this because Jones’ home and family are protected by ADT.

Jones is a participant in an interesting new video advertising campaign from The ADT Corp. called ADT Home Turf. Not only does the video series feature virtual tours of famous athletes’ home for the curious—all the while explaining how the athletes’ ADT systems protect those homes—but it also is tied to a sweepstakes offering a free ADT system and sports tickets.

Here’s how ADT puts it: “Check out how ADT helps some of your favorite athletes secure their own home turf and … enter the sweepstakes for a chance to win an ADT system, a year of free monitoring, and a trip for 2 to a professional basketball playoff game including tickets, airfare, hotel and spending money.”

I got to learn that Jones has an affinity for tequila and that he gets his trademark dreadlocks professionally done. And I also got to see him deal with a “false alarm.” His smartphone notified him that his ADT system detected someone entering his garage side door. The intruder? ZuZu, who got a gentle scolding. Jones instructed his dog to play with dog toys instead of scoping out his in the garage.

After ADT spun off from Tyco this past fall, ADT's CEO Naren Gursahaney told me it's "not a moonshot" for the company to increase its residential penetration from the industry standard of 20 percent to as much as 40 percent. Clever ad campaigns like this should aid in that goal.

 

 

AT&T gets into mobile PERS; Puro resigns at CRN Wireless

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Wednesday, February 27, 2013

Mobile PERS is fast becoming the land of the giants.

AT&T is the latest to get into the game, announcing on Feb. 21 that it will provide the wireless network and location services for Libris, a mobile health management system from Seattle-based Numera Inc. The news follows ADT’s announcement in January that it’s getting into mobile PERS by partnering with Toronto-based health tech provider Ideal Life.

The target market for both ventures is similar: active senior citizens looking for an extra measure of safety, and those with chronic conditions who want health monitoring inside and outside the home. Libris delivers by integrating biometric readings, two-way mobile voice, automated fall detection and location tracking.

“Incorporating continuous monitoring of an individual’s activity, location and important health measurements, [Libris] breaks new ground in bringing together personal safety and telehealth in a mobile device,” said Chris Penrose, senior vice president of emerging devices for AT&T, in a prepared statement.  

While the competition for remote patient monitoring is getting more intense, there’s probably a lot of room left in the sandbox for players of all sizes. The telecare and telehealth market is expected to exceed $1 billion by 2016 and grow to $6 billion by 2020, according to Numera.

Puro resigns at CRN Wireless: In other PERS-related news, e3 Investment Partners announced this week that Nicholas Puro has resigned as CEO of CRN Wireless. He will focus on other opportunities in network services, monitoring and security, according to an e3IP news release.

“I am particularly interested in network services and wireless monitoring in the medical and pharmaceutical field,” said Puro, who is listed on LinkedIn as managing director of e3IP. “There are vast opportunities for new products and services ranging from fully mobile personal emergency response systems to wireless monitoring of pharmaceuticals through the cold chain.”

Earlier this month, CRN Wireless launched two 4G cellular alarm communicators through its AlarmPath division.

Get your new product listed in SSN

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Wednesday, February 27, 2013

Got new product? Exhibiting at ISC West?

If so, you may submit your product for Security Systems News’ ISC West New Show Products section.

All companies exhibiting at the show can submit one product that is making its debut at ISC West 2013 in April, but companies that have more than one product division may submit one product for each division. That's like video and access--not different flavors of video, OK? Please attach a jpeg image of the product to the email.

The process is easy. Just send the following information, in the body of an email to Cath Daggett  cdaggett@securitysystemsnews.com

1.  Company name
2.  Company website
3.  Product name
4.  Three bullet points that describe your product, each 12 words or less
5. Company telephone number—only ONE please (to be published)
6. ISC West booth number (essential; you must be exhibiting at ISC West)
7.  Image of product ( JPEG file with a DPI of 300 or greater. No PDFs, please.)

The firm deadline is Wednesday, March 6. Space in the issue is limited, so submitting early ensures you a place in the section.

Questions? Call or email me or Cath.

 

ADT shares predicted to rise 20 percent

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Wednesday, February 27, 2013

An article in Barron’s has the financial media world abuzz because it predicts shares of The ADT Corp. “could climb by more than 20 percent over the next year.”

The article in the latest edition of the weekly financial newspaper owned by Dow Jones cites the push into home automation by the publicly traded ADT, which spun off from Tyco in September. ADT Pulse, introduced in 2010, is the driver of much of ADT’s growth, the article said.

Barron’s also indirectly suggests ADT could buy a rival like Vivint or that ADT itself could be acquired. The article refloats the rumor that AT&T could acquire ADT.

The article concludes: “It may be time for investors to pick up the smartphone and tap the ADT Pulse icon.”

Here’s some more details summarized by Reuters:
 

According to [Barrons], the Boca Raton, Florida-based company is already benefiting from a stronger housing market, rising demand for home healthcare services, and recent acquisitions, and commands 25 percent of the home alarm business and 14 percent of the small business segment.

… At the center of ADT's expansion effort is Pulse, a nearly 2-1/2 year old product that lets customers control settings remotely through devices such as smartphones and tablets.

While Pulse serves just 4 percent of ADT customers overall, the company in January said 19 percent of new customers use it.

ADT last month also set plans to quickly buy back $600 million of stock under an existing $2 billion repurchase program.

… It also said ADT could buy rivals, which are mainly owned by private equity firms such as Blackstone Group LP.  [which owns Vivint]

Based on recent transactions for security companies, ADT could fetch $59 per share in takeover, the newspaper said.

Shares of ADT closed yesterday at $46.57.

 

Back in the saddle: Gearing up for Vegas and ISC West

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Wednesday, February 20, 2013

ISC West can bring on sensory overload, from the din of the crowd to the glitzy displays to the lower-limb fatigue that comes with keeping yourself upright for eight hours at a stretch. Throw in the never-ending (and endlessly varying) spectacle that is Las Vegas and you have a lot to wrap your head around.

It’s quite a scene, especially for industry newcomers. That was the boat I was in last year for my Vegas initiation, which I’m glad to say resulted in little long-term damage. Aside from sleep deprivation blamed on three nights of frat house auditions in an adjacent hotel room, I emerged none the worse for wear.

Now it’s time to gear up again.

The emails with “ISC West” in the subject line are already flying and appointments are being penciled in. For those who haven’t taken a close look at the calendar lately, it might come as a surprise to learn that a return to the Sands is only seven weeks away. April will be here before you know it, with much to prepare for in the meantime.

With that in mind, I started an ISC planner yesterday. It’s quickly filling up. The educational sessions alone are enough to keep attendees focused squarely on the show instead of what might await after-hours. Here are a few sessions that drew my interest:

— “Staying Connected: Leveraging the Cloud and Mobile Applications for Enhanced Security.” Everything in the world, security included, is going mobile. If you don’t believe it, ask anyone with a smartphone—assuming they’ll look away from it long enough to answer you.

— “Counterfeit Products in the Security Industry: A Very Real Problem for All of Us.” If you don’t think they’re out there, you’re wrong. And like other knockoffs, they’re probably only going to get more difficult to detect.

— “60 Sites, 50 Miles and 5 Key Lessons Learned: How One School District Made the Move to IP Video Surveillance.” In the wake of Newtown this will be a hot-button issue, with an obvious upside for security interests.

— “The Great Debate: What to Use, What to Lose.” Technology is exploding, but "assets" deployed improperly can become expensive liabilities. Jay Hauhn of Tyco Integrated Security and Fredrik Nilsson of Axis Communications will help attendees learn from others’ mistakes and successes.

There are more than 60 educational sessions planned, starting on April 9 and running for three days. There also will be three rotations (April 10-12) of networking on the 200,000-square-foot show floor, so heels are strictly optional (for this writer, anyway). Other common-sense advice for first-timers includes not skipping breakfast—it’s easy to go through a day at the show and realize at 5 p.m. that you haven’t eaten anything—and bringing a water bottle to stay hydrated. For a complete schedule and more survival tips, go to www.iscwest.com.

Vivint in top 50 of Forbes’ top 100!

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Wednesday, February 20, 2013

Vivint made it into Forbes’ annual ranking of America's Most Promising Companies this year, marking the first time the Provo, Utah-based home automation/home security company was named to the exclusive list.

And with a ranking of 46 out of the 100 privately held companies listed, Vivint—which bills itself as the largest home automation services company in North America--actually made it into the top 50 of those successful businesses.

Revenue growth and hiring are two factors used to determine which companies make the list. Forbes lists Vivint’s revenues as $400 million and the number of its employees as 2,533.

Pivot3, an Austin, Texas-based provider of video surveillance storage solutions, is the other security company on this year’s list. Ranking #74, Pivot3 has $31 million in revenue and 92 employees, according to Forbes.

Vivint President Alex Dunn told Security Systems News, “It’s really nice to have third-party validation of what we're trying to accomplish … and it will help bring credibility to our strong management team and the company. But, in the end our success is not based on what awards we win and don’t win, but on how we take care of our customers and how we innovate around products and services [ensuring they’re] simple to use and affordable.”

Here’s more from Vivint’s news release on the Forbes’ list.
 

Vivint's inclusion on Forbes' list comes after a momentous year for the company, in which it crossed the threshold of $30 million in recurring monthly revenue--one of only three companies in its industry to achieve this milestone. Since 2007, the company has experienced a growth rate of 400 percent. Acquired in 2012 for more than $2 billion by Blackstone [http://www.securitysystemsnews.com/article/blackst..., Vivint was selected to the Forbes list for its growth (in both sales and hiring), the quality of its management team and its investors, product strength, margins, market size, and key strategic partnerships.

One metric never says it all. For the Most Promising list, Forbes strove for a holistic gauge of young, privately held companies, trying to pin down their trajectories by looking at a slew of variables. Over the course of six months, Forbes reviewed thousands of applications. Forbes turned to CB Insights, a Manhattan-based data research firm that specializes in assessing private companies, to refine the search. Their MOSAIC software scans 45,000 sources to measure a company's health. A new distribution deal, for example, marks a positive signal, while the loss of an executive is a negative. MOSAIC gathers those myriad signals into a final score that Forbes uses as an initial guide in producing the list. After verifying sales numbers, speaking with each company and debating their merits and blemishes, Forbes produces a final ranking.

To view the complete 2013 list of America's Most Promising Companies, visit www.forbes.com.

 

G4S Technology gets new EVP

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Wednesday, February 20, 2013

G4S’s integration business, G4S Technology, (formerly Adesta), has a new EVP: Sam Belbina. Belbina will be in charge of business development, marketing and communications, and strategic initiatives such as new markets and the expansion of National and Global Services business.

Belbina comes from Schneider Electric where he ran sales for the Schneider/Pelco video brand and the integrated security solutions business in the United States. “In this role, he captured and managed over $400M in business,” G4S said.  

Belbina will report to Bob Sommerfeld, president of G4S Technology.

SAFE Security expands into DIY, with help from Honeywell

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Wednesday, February 13, 2013

Wow! SAFE Security is really making news lately. First, it was acquired late last year by ICV Partners, a New York-based investment firm focused on lower middle-market companies.

Then, it announced earlier this month that it had just bought about 24,000 alarm monitoring accounts from Orem, Utah-based Pinnacle Security—a summer-model company the select assets of which Protection 1 recently purchased.

Now, SAFE announced today that it’s entering the DIY home security market by launching a new division, SAFE@home, that “allows homeowners to self install a Honeywell wireless security system with professional monitoring.”

Here’s more from a news release from the San Ramon, Calif.-based company, which has operations in 44 states:
 

SAFE Security, one of the nation’s largest security alarm companies has launched a new division, SAFE@home. This new division will enable a consumer to self install a wireless security system at their home with ease. This DIY home alarm system will include professional UL certified Five Diamond monitoring by SAFE Security and will not require a phone line. The home security system can be controlled remotely by a smartphone or tablet via Honeywell’s Total Connect. The system is available across the continental US.

“With an increased demand in the residential security market for a self installed alarm system coupled with increased technology that allows for a wireless security system to be setup in minutes, SAFE@home is well positioned to be a leader in the DIY security space,” said Paul Sargenti, SAFE’s President and CEO. “We’ve partnered with Honeywell to provide a state of the art wireless security system and will accommodate Wi-Fi for IP alarm communications. This will allow our customers to take advantage of being able to self-install their wireless security system. By enabling our customers to self install, they will save money by not requiring an alarm company to install the alarm system.”

Customers can select from 3 complete packages and add on additional hardware to best fit their needs.

I’ve reached out to Sargenti to learn more about all these developments. Look for more about SAFE Security on our site in the near future.

 

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