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ADT sued for employee spying on customers through Pulse system
June 12, 2020
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Title:  Understanding the buy-sell process
When:  June 16, 2020  12 PM ET
Description:    Webinar will explain the process.  How to prepare for sale (contracts, proper entity, etc), understand RMR, attrition, the NDA process, negotiating the deal, responding to the LOI, due diligence, etc
Presented by:  Mitch Reitman and Dennis Stern,Esq
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Who should attend:  owners
ADT sued for employee spying on customers through Pulse system 
by Jesse Kirschenbaum,Esq​ 

     ADT is currently facing two class action lawsuits, both claiming that an ADT technician spied on customers by accessing their ADT Pulse home security cameras. This is a serious matter for ADT and a PR nightmare once..  The technician spied on over 220 households in the Dallas area over a 7 year period.  And this may not be an isolated incident considering the vulnerability within the ADT Pulse system.  ADT is now reviewing other customer accounts and with 6 million customers nationwide,there may be other instances. The only reason the technician was caught was because a customer noticed an unusual email address authorized to access his ADT Pulse web portal and reported it to ADT.
     Once ADT became aware of the situation it started contacting customers to inform them that a security flaw had allowed unauthorized access to customer accounts.  ADT conducted its own investigation and discovered that the technician was gaining access to customer ADT Pulse web portals and mobile applications by adding his personal email address to the account.  This allowed him to remotely log in and view and control the security system throughout the house.  He not only spied on members of the household, but at the time he installed the cameras he also placed wide-angle lens on customer cameras to be able to watch customers or family members getting dressed or doing other very private acts not meant to be seenon camera. 
     Both class action lawsuits are seeking $5 million in damages.  One of the lawsuits was filed on behalf of ADT customers who signed contracts with ADT and the other on behalf of members of the customer’s household.  There was undoubtedly a strategy in commencing two separate lawsuits.  The action by the ADT customer would be governed by the ADT contract, but the action by third parti ADT’s contracts contain an arbitration provision, among other provisions that insulate ADT from liability.  ADT has filed a motion seeking to arbitrate the dispute with its customers who signed contracts.   If ADT prevails in enforcing its arbitration provision that may end the class action and require each customer under contract to commence their own action.  While arbitration is private and usually quicker than court proceedings, each customer would be required to separately pursue their claim..             ADT would be wise to get these matters resolved quickly.  We don’t know yet whether ADT shares any blame for the rouge employee who acted criminally.  Hopefully ADT adhered to proper hiring practices and licensing requirements.  What fault ADT has for the Pulse system or failing to properly supervise its employee, if any, remains to be seen. As of now the class of potential claimants is several hundred and they will have to show some measure of damage, in this case likely emotional and psychological.  Lucky for them ADT  has deep pockets, which attract class action lawyers like flies to ….., and ADT will probably end up trying to resolve this quickly, always a dream come true for class action lawyers.
     I should point out that the Standard Form Agreements have an Arbitration Provision that prohibits class actions, one good reason for using the Kirschenbaum Contracts ™.
Jesse Kirschenbaum, Esq.
Kirschenbaum & Kirschenbaum, P.C.
 (516) 747 - 6700 x. 329

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301