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Comment On Selling Monitoring Accounts
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Ken,
    With due respect to the alarm co who is selling his monitoring accounts to Monitronics from the Sept 12 2014 article, which stated:
     Ken,
          “We sell our contracts to Monitronics as we are part of their dealer program. That said, we get charged back if the customer doesn't pay their bill within the first 13 months. So we are going to remove the customers equipment from their home. Is there anything we need to do to cover ourselves legally, especially since the contract is now technically with Monitronics?  Thanks  anon”
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    Thank you for some great articles dealing with the realities of the security industry.  Being from the “old school,” why do you folks sell these monitoring accounts? They are worth their weight in dollars.  They don’t allow your company to have any value with the exception of some local referrals, depending on your size, length of being in business, and recognition.
    You still need to service the account for new growth needs, add-ons, and service, and the few dollars you get for service may be more of a nuisance than the dollars reaped from the service.  Also, the consumer may not appreciate the “arms length” connection.  I was involved in that scenario and it sure got ugly in spite of the contractual legality of it.  Maybe before going into this type of relationship the potential customer/consumer needs to be completely aware of the 3rd party relationship with the sale of the paper.
    Interesting too (to me) that “anon” didn’t identify themselves so I’m sure they don’t want to embarrass themselves, but they shouldn’t feel that way.  They should seek good counsel to consider making their hard work they put into their company as valuable as possible down the proverbial road.
M
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Response
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    I am not a fan of selling off subscriber accounts, usually the monitoring accounts, because you are correct that you are selling off your equity.  If you hand in there the cash flow will eventually turn from red to black.  But, the alarm industry has come a long way from the "early" days.  The industry is not populated by just engineers, mechanics, technicians and mom and pop entrepreneurs.  I've had to consult with bankers and big wigs who want to get into the RMR businesss or are already in it.  Also, typically young highly aggressive and intelligent entrepreneurs who see the alarm industry as a way to get rich quick.  That's certainly a different model than toiling away for a lifetime, making a good living and hoping to be able to build something to leave to your kids so they can have the easy life.  That's the old model.  
    Whichever model you chose, chose wisely and understand which path you're on and where it leads.  Can you expect to have it both ways?  I'm not so sure.
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Electronic Contracts - Proving Sub Signed
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Ken,
    Long term reader, first time writer.  Thank you for time that you put into your newsletter, it is very appreciated.
    I do not understand the electronic capturing of a signature being prove of a person agreeing to the terms and conditions of a contract.  
    In a 'big' case it seems like a good plaintiff attorney could call into question if his client ever 'signed' the document and if they ever saw the document.  
Or if the document changed.  And what was the chain of custody of this electronic document.
    I have had many conversations about this with many attorneys and have never heard a good argument.  Most attorneys do not have a technical understanding of electronic documents.  It seems that the capturing software, and hardware, would need to be somehow verified or certified by a third party. 
    By way of background, my education is as an electrical engineer with a computer minor.   I consider myself to be a coder.  I have been in the Security Industry since 1979.  We were very early adopters of paperless storage, except liability contracts.   I am surrounded in life by attorneys (father, wife, 2 brother in-laws, and three sister in-laws).  That's a lot of attorneys. 
    About ten years ago I was involved in a large will contest case as a trustee of a large charitable foundation.    The lawsuits lasted 7 years and cost north of $7M to defend.  I found it unbelievable what items got questioned and what 'expert' witnesses would testify to.   Signature's that were witnessed by multiple attorneys were questioned, paid hand writing experts testified that signatures were not who they actually were.   In the end we prevailed at every step but it opened my eyes to the complications involved in big litigation. 
    As a coder I know how easy it is to insert anything anywhere at anytime with any date stamp with almost any file type.    How in a big case could our electronically
signed contacts not be questioned?  I know a paper contract with a inked signature could and would also be questioned, but that seems much easier to prove to a jury
than a electronic version.   
    I know very large companies with very smart coders and very smart attorneys already have this figured out, but I do not understand.
John Lindberg
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Response
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    In a civil sitting we are not concerned with chain of custody.  We are concerned with proving the subscriber either signed the contract, approved the contract or ratified the contract.  This can be done in a number of ways.  Seeing the subscriber sign is probably the best.  But if you have email correspondence from the subscriber's known email address approving the contract that is sufficient.
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TO SUBMIT QUESTIONS OR COMMENTS REPLY TO THIS EMAIL OR EMAIL Ken@Kirschenbaumesq.com.  Most comments and questions get circulated.

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                                      Speaking Engagements


If you would like to schedule a free live video/webinar presentation for your association meeting or event contact Eileen Wagda at 516 747 6700 x 312.

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Alarm Association of Greater St. Louis.   September 16, 2014.  at Tech Electronics HQs office at 6437 Manchester  Ave, St. Louis, MO 63139.  Meeting is from 11:45 – 1:30  Video conference presentation starting at 12:15 CST.  For more information or to register contact Tony Drago adrago@tyco.com  www.alarmstl.org
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NYSESA - September 17, 2014 at Honor's Haven Resort, Ellenville, NY.  This is the NYS Electronic Security Assoc annual meeting.  Presentation on updated contracts and current legal issues will be at 10:30 AM.  For more information or reservations contact Dale R. Eller, Executive Director (814) 838-0301  dalereller@itzsolutions.com
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Texas Burglar and Fire Alarm Association.  October 1 - 4, 2014,  annual convention at San Luis Resort Spa & Conference Center, Galveston, TX.  Register here:  http://tbfaa.org/tbfaa-2014-convention-trade-show-attendee-registration/
For more info contact Debi at 281-859-4569.  Brad Shipp, Executive Director
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Alabama Alarm Association.  AAA's Fall Meeting and Trade Show - October 21, 2014 from 3 to 5 PM at DoubleTree Hotel 808 South 20th Street Birmingham, AL 35205  for more info contact AAA Executive Director: director@alabamaalarm.org  (205) 933-9000 

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