DCA Sounds the Alarm on Fraudulent Alarm System Company Practices

They are out there, and they may be knocking on your door soon. During this time of year there is usually an upswing in alarm companies sending out their employees to canvass neighborhoods, trying to sell alarm systems. While selling alarm systems door-to-door is legal if required permits and licenses are in place, there are some unscrupulous companies that have their agents use tactics that violate the law, which can result in consumers paying excessive costs for alarm services or entering into a new alarm contract for what they believe involved an upgrade to the alarm system on their current alarm contract.
Here are some tips DCA’s Bureau of Security and Investigative Services (BSIS) wants you to know:

Sales agents must be licensed
BSIS licenses and regulates alarm companies and their employees, alarm agents. Alarm agents sell, install, and service alarm systems at homes and businesses. They must carry proof of licensure and present it when asked.

Verify the license and check the company
Before doing business with any door-to-door alarm company salesperson, ask to see their BSIS Alarm Agent Permit to confirm that individual is currently licensed.

If the salesperson claims to be there to update your current alarm system, also ask for proof of the name of the company he or she works for and the company’s BSIS alarm company license number. You should verify the sales agent’s license and, if applicable, the alarm company’s license using the “License Search” button at www.bsis.ca.gov.

Read the contract before you sign  
Before the work to install any alarm system begins, a copy of the full contract signed by an agent of the alarm company must be provided to the consumer. Alarm company contracts must be in writing and must include the following information:

  • The alarm company’s name, business address, telephone number, and BSIS alarm company license number.
  • The alarm agent’s BSIS registration number if an agent solicited or negotiated the contract.
  • The approximate dates your scheduled work will begin and be substantially completed.
  • A description of the alarm system to be installed, including what work is necessary to install the system, the materials that will be used for installation, and the cost of the system and services.
  • A description of other services (e.g., alarm system response or monitoring services) to be provided by the alarm company after installation of the alarm.
  • A clause stating the alarm company will teach the buyer how to properly use the system after it is installed.

If the total value of the contract exceeds $250, it must also include a schedule of payments and information about the permit fees charged by local governments. (NOTE: A down payment may not exceed $1,000 or 10 percent of the contract price, excluding finance charges—whichever is less.) The contract must also disclose if monitoring services are being provided. Also, never sign a blank contract.

The Federal Trade Commission’s “Cooling-Off Rule” gives you three business days to cancel the deal if you sign the contract in your home or at a location that is not the seller’s permanent place of business. You don’t have to give a reason.

Beware the automatic renewal
Alarm system monitoring contracts may contain an automatic renewal clause that binds a consumer to the contract for an extended period after the expiration of the initial contract term unless the consumer cancels the contract as specifically outlined in the contract. Effective January 1, 2017, consumers must be provided a written notice if the alarm contract presented to them includes an automatic renewal provision that renews the contract for a period of more than one month. Prior to signing the contract, the consumer is to acknowledge receipt of the disclosure by signing or initialing it. If written acknowledgement is not obtained from the consumer, the automatic renewal provision in the contract is invalid.

Don’t be pressured
If you’re not interested, say so. If the salesperson won’t leave, call the police.

If you are interested in an alarm system, ask for referrals from friends and family members who have had successful experiences with an alarm company. Also, get an estimate from more than one BSIS-licensed alarm company.

The BSIS “Consumer Guide to Alarm Companies” details important information about alarm companies and their employees, purchasing an alarm system and/or alarm system monitoring services, and how to file a complaint against an alarm company or one of its employees.

To file a complaint against an alarm company or an alarm agent with BSIS, visit www.bsis.ca.gov or call (800) 952-5210.

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