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Question
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Hi Ken,
I have 2 questions. First one is why is it necessary to send out two copies of the cancellation form when it's already on the contract itself and second what do you suggest we do about customers who refuse to sign a contract. We send a letter out with our contracts offering 1, 3 or 5 year terms and then we even offer month to month but there's a handful of people who still won't sign regardless. Any suggestions? Thanks so much.
Sharon
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Answer
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You are referring to the 3 day notice of cancellation. This notice is required by statute in every state, and by Federal Law. The notice is required for all door to door sales for residential contracts. For an easy and perhaps over simplified explanation of what door to door sales mean, the test is whether you had to visit the residence at any time prior to the contract execution. So if you go to the house to survey it and then mailt he contract to the subscriber, you need to provide the 3 day notice of cancellation. If you have a retail store and the subscriber comes to you, signs a contract at your store and you then go and install the system. You don't need to cancellation notice. Of course, you send high pressure salespeople [even if not so high pressure] knocking on doors or visiting residences after the subscriber answers an ad and invites you to the house, you need to comply with the 3 day notice of cancellation.
The two notices are you referring to are quite different and both are required in most jurisdictions. The first notice, required in all jurisdictions, is the notice that appears on the contract immediately above the place reserved for the subscriber's signature. That notice usually lets the subscriber know that there is a 3 day cooling off period and it refers to another form that explains certain rights regarding the cancellation process. This is the second notice you refer to. It is the actual form that the subscriber uses to cancel, by signing and sending it to you. Not every state specifies the exact form of cancellation, and some states permit any form by the subscriber to be used. Because states have different statutory requirements the residential contracts need to be customized state by state, which we do when we provide the Standard Residential Form Contracts.
It's important to comply with the cancellation notice and process because in most jurisdictions the subscriber can cancel up until 3 days after the notice is provided, even if you've already installed the system. You can be in a bind and you'll have to remove the system and restore the premises. Another issue that can come up is violating your state's deceptive business practice laws if you blatantly and persistenly ignore the cancellation law. The enforcement agency in your state could take the position that you have to offer cancellation and refund to all of your subscribers, not to mention fines [just in case you can survive the subsciber cancellations].
If your contracts do not have the cancellation notice and statutory form then I suggest you update your contracts today - go to www.alarmcontracts.com
With respect to your second question about subscribers refusing to sign contracts, I remind you that the single most important feature of the alarm contract is the right to "contract away liability for your own negligence". Next important feature is enforceable RMR. You accomplish neither without a proper signed contract. Whether you decide to provide service to a subscriber who hasn't signed a contract or pass on the job, you should carefully weigh the risks. An important subscriber with a large contract or lots of business may compell you to accept the risk, while a single residential subscriber who is paying a small amount for monitoring may not be worth the bother and risk.
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