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ARE NO CONTRACT ALARM ADS JUST MISLEADING OR MORE
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    On way to work today I hear a radio ad for alarm services "with no contract".  The company was "Think" something or other.  I think I read a print ad in AARP [yes I am a member] for "Simpli" or something like that.  These companies not only offer alarm services with "no contract" but denigrate other alarm companies because they require subscribers to sign contracts.  
    Problem is, at least one of these companies, the "Simpli" one, does require that a subscriber agree to terms and conditions.  I am curious where this company got the lawyer who told them that agreeing to terms and conditions isn't a contract.  
    So what I think these companies mean is that they don't require a subscriber to agree to a long term agreement; the customer can cancel anytime.  But that's not the same as alarm service without any contract.  It's going to be interesting to see what happens when one of these companies have a claim against them and try and defend on their contract provisions, or their terms and conditions.  The Plaintiff lawyers will be playing the ads and presenting the print ads to the judge and jury to advance the argument that the poor plaintiff [who we know is deemed the least sophisticated consumer] was duped and fraudulently induced to accept alarm services from the alarm company when the Plaintiff believed there was no contract.
    My advice.  Stick to the plan.  Use proper contracts; deal honestly with your subscribers; build your RMR; get fixed term agreements, 5  years residential and 10 years commercial, with month to month renewal thereafter.  Regularly upgrade your subscribers' services and your alarm contracts.
    These are the forms most alarm companies need - you get them at www.alarmcontracts.com    

  • Residential All in One
  • Commercial All in One
  • Commercial Fire All in One
  • Disclaimer Notice
  • Home Automation and Integration Agreement
  • PERS
  • Nationwide PERS
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    MORE ON 3 DAY NOTICE OF CANCELLATION
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    Ken
        Please note that in Pennsylvania the HICPA (Home Improvement Consumer Protection Act) now does not care where the contract is signed.  It states under section 13 subsection B:
        Right of Rescission.  An individual signing a home improvement contract, (except as provided in the emerrgency provisions of section 7 of the act of December 17, 1968 (P.L.1224, No. 387) known as the Unfair Trade Practices and Consumer Protection Law, shall be permitted to rescind the contract without penalty regardless of where the contract was signed, within three business days of the date of signing.
    Cyndi Miller
    General Manager
    Advent Security Corporation
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    RESPONSE
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        Thanks for the heads up.  Better to be safe than sorry, so use the notice of cancellation.
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    Ken,
        Great answer to the question on Three Day Right of Refusal (ROR).  I wanted to add a bit from a business standpoint.  There is a misconception that the ROR prevents the Dealer from installing the system for three days.  Dealers can install any time that they choose, the ROR allows customers to change their minds in three days and the Dealer would either have to remove the system (not likely) or the customer gets to keep it for free.  Some companies install the system the same day and just roll the dice that the customer won't cancel.  If you want to install the same day, do so at your own risk, and, get a valid, signed ROR.
        We perform contract reviews and very often encounter issues with the ROR.  Most issues are the result of the Selling Company not having a sufficient ROR (not a problem with Ken's agreements) or not having one at all.  Remember that when you sell your accounts the Buyer is going to make the final determination of whether or not the ROR is adequate.  If a customer came to your office to purchase the system and you did not get a ROR, the Buyer of that account may reject it and you have very little recourse.  My advice, use legally sound, and updated, agreements, resist the urge to make changes to them, get them signed, and get ROR's on all of your residential agreements.  Your agreements are your most valuable asset, don't be penny wise and pound foolish. 
    Mitch Reitman
    www.reitman.us
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    Ken
        If an electronic contract is sent from the office, is that in home or in office?  If the sales representative goes to the house to conduct a survey on a lead where the customer called in, and later sends an electronic contract from the office is that considered in home or in office?
    anon
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    RESPONSE
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        As you can see from above, it may not matter where that contract is signed or how it got signed.  If it's a residence then the 3 day notice applies in some states.  In a state that applies the cancellation notice when it's a door to door sale then the all electronic format may not require the notice.  If a representative has been to the house the safer approach would be to provide the cancellation notice.  Keep in mind that if the cancellation notice is required then the consumer has 3 days from when you actually provide the notice of cancellation form. The contract will have the "notice of cancellation" right, but it will refer to the attached cancellation form, and that's what you have to provide.
        If you have a website that the subscriber visits and signs an electronic form agreement to obtain [sale or lease] the alarm equipment and services , and you don't visit the home prior to execution of the agreement, then you won't need the cancellation form [except in PA apparently].  The contract form will still have the notice of cancellation right, and it's not likely that an online execution will result in any installation within 3 days anyway.  As I mentioned in my prior article on this topic, it's not likely that the cancellation form can be provided electronically.
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