Home Alarm Sales Account for Major Source of Consumer Complaints, Says CFA
Consumer Federation of America released its annual Consumer Complaint Survey Report for 2017, which found that alarm system sales are raising concerns.
LAKE TAHOE, Nevada — Alarm sales scams emerged as a major area of consumer grievance last year, according to the Consumer Federation of America (CFA).
Each year, CFA surveys state and local consumer agencies to identify what consumers are complaining about, and then publishes the findings in an annual report.
The newly published 2017 report found there was a considerable upsurge in complaints about companies selling home alarm systems, ranging from misleading information to scare tactics.
The report states these transactions are often initiated by telemarketing, direct mail or salespeople going door-to-door. The complaints involve the use of scare tactics and misleading claims, lack of full disclosure about the costs and terms of the transactions, failure to provide notice of consumers’ cancelation rights, and locking consumers into long-term, automatically renewing contracts.
Consider this case in Ohio, reported by the Cuyahoga County Department of Consumer Affairs, about a security dealer that used scare tactics to sell alarm systems. The alarm company mailed letters that appeared to be from county government — complete with the name and logo — to nearly 900 new homebuyers.
The fictitious letter warned residents that their neighborhoods were unsafe due to “the urgent opioid crisis” and informed them they qualified for “free” alarm systems as part of a countywide program. The letter made no mention of any fees and provided no evidence to back up the worrisome claims about crimes.
According to the report, when the agency contacted the alarm company it agreed to stop sending the mailings immediately, turn over its mailing list, and pay the costs for the agency to send a follow-up mailing to the consumers explaining the letter they received was not from or endorsed by the county, and giving them information about the use of the word “free” in sales solicitations.
Among other alarm system complaints was failure to provide customers with copies of their agreements and failing to notify them of their cancellation rights. There were also instances where consumers who already had an alarm system were told their company had been sold and they needed to change where they sent the payment. Double billing did ensue.
“Alarm systems are supposed to protect consumers, but consumers need better protection from rogue alarm companies and salespeople who try to take advantage of them,” says Susan Grant, CFA’s director of Consumer Protection and Privacy.
Grant says companies marketing home security and alarm systems should be required to make clear disclosures and be barred from making misleading and unsubstantiated claims.
You can read the full report, including the Top Ten Complaints in 2017, here.
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