BOCA RATON, Fla. — ADT (NYSE: ADT) has been awarded $3 million in compensatory damages and $1 million in punitive damages against Alder Holdings, a Utah-based security company that operates a door-to-door sales model.
In 2017, ADT filed an unfair competition lawsuit against Alder alleging deceptive sales practices. The company asserted that Alder’s sales representatives canvassed neighborhoods in search of homes with ADT yard signs. The salesmen would then claim to represent ADT and dupe the customers into signing contracts with Alder’s competing service.
The jury in the case — tried in May in the U.S. District Court for the Southern District of Florida — returned a verdict in favor of ADT, finding that Alder engaged in, and was liable for, deceptive sales practices that misled hundreds of customers.
In a press release, ADT Chief Legal Officer David Smail states the jury’s verdict “sends a clear message that deceptive sales practices in our industry are neither viable nor tolerable.”
“The few remaining companies that continue to deceive consumers to generate sales undermine the integrity and reputation of the many in the industry that are honest and compete fairly,” Smail continues. “At ADT, we are not only committed to protecting our customers, but also to continuing efforts to end deceptive sales practices in the security industry overall.”
The company originally sought approximately $17 million in compensatory damages from Alder. Following the jury’s decision to award a total of $4 million in damages, ADT requested U.S. District Judge Robin Rosenberg increase the compensatory damages to $9 million.
On May 30, Rosenberg upheld the $4 million penalty, describing it as “an adequate sanction.”
The company has a separate lawsuit pending against Alder for its failure to pay more than $2 million under the terms of a 2017 settlement agreement.
ADT has filed multiple lawsuits in recent years against security companies engaged in deceptive practices, and has obtained several permanent injunctions and recovered millions of dollars in settlements, the press release states.
“With the summer-selling season upon us, consumers need to be extra vigilant when any sales representative is at their front door. Unfortunately, the representative may not be telling the truth,” Smail says.
