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Billing cycles

April 5, 2023
Billing cycles
            We love the emails. Quick question: in Massachusetts is it legal to bill for monitoring annually.  
I am hearing of more and more companies doing this in the Massachusetts area. I know this has been an issue in the past with company's going out of business after collecting the annual monitoring. 
            I am not aware of any prohibition regarding billing annually or any other cycle in advance.  The Standard Form Agreements provide for a selection from monthly, quarterly, semi-annually and annually.  Then the itemized services call for the monthly amount, no matter how often it’s billed.
            I think what you should keep in mind is that you are collecting for services to be rendered.  I don’t know that any state has determined that you are in essence receiving funds that should be held in trust.  I suppose a company that engages in a scheme to collect for services it doesn’t intend to provide could attract the attention of the state’s attorney general.  I don’t think however, that collecting fees in advance would necessarily be treated as trust fund money or as a fraud just because you are unable to provide the service or go out of business. 
            I don’t know of many alarm companies that have gone out of business and by that I mean just closed their doors abandoning their customers.  Most alarm companies that have found themselves behind the eight ball manage to sell or merge or find another alarm company to take over the customers.  In all my years of representing alarm companies I can think of only one time when an alarm company asked me to find another alarm company to just take over the accounts.  Every other time it’s been a sale. 
            Whatever cycle you choose make sure you stay ahead of your customer, sending out your invoice in advance.  Your customer should already be in default if it hasn’t paid into the new billing cycle.
            Just a reminder, when you use the Standard Form Agreements K&K’s collection department will assist with you collections.  Contact Kathleen Lampert at 1 516 747 6700 x 319 or

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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