KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Comment on stealing customers
June 4, 2020
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Comments on stealing customers from May 29, 2020 article
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Ken,
Many years ago early on in my business, I had a local monitoring station monitoring my accounts. After several years with them I decided to move them to another company. As the customer accounts came to renewal I moved them from the old to the new one. One day the Old Monitoring station called me and asked why I was not adding new accounts? I told them I have chosen to move them to a new Central Station offering better services. The next day that Central station sent a letter out to my customers telling them I went out of business and if they want their monitoring to continue they would need to send him the money and he offered them a discount. Some did and some did not. I started calling all my clients to let them know this letter was untrue and I have not went out of business. I sued the company and I reported them to the NC License board at the time. Neither was successful in curbing the atrocity. The License board was Political and were in team with his Station, The Court kept pushing the case along and judges did not want to even hear the case. To try and fight it was going to cost me a lot more money than I lost. Eventually, I got most all my clients back but the issue was nobody really cared about it even the alarm board. I have dealt with some of the Alarm boards from 2 States and it’s mostly alarm dealers who care about protecting themselves from competition.
Terry S
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Ken
Forget the lawsuits which large companies like ADT can afford to fund; much simpler and effective way to go, if in fact they are targeting your customer accounts, is to file for a temporary restraining order and permanent injunction; more important than including the company in this action is including the sales person who is engaged in these inappropriate sales tactics; as to the sales person, arranging for service of the court documents at his house in the evening when the family is present usually sends a strong message that dissuades the sales person from continuing the conduct as he, and now his family understand, what the consequences of his inappropriate conduct may mean-depending on his employer and whether or not they knew of the conduct, the company may not provide counsel which mean the sales person may need to get his own counsel; all of this will encourage him/her even before the hearing, which is usually scheduled in a matter of days, to discontinue "stealing" accounts. If he truly inappropriately went after the customer accounts, good chance that a permanent injunction will issue- that may well have continuing employment consequences for the sales person, and other sales person in the company will take due notice of that-this approach with companies I have been in-house counsel for has worked very effectively to nip the problem in the bud and avoids the need for long drawn out litigation.
Regards
Dennis Stern,Esq
Kirschenbaum & Kirschenbaum
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Response
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First Terry. A central station has one legitimate reason to solicit your accounts, and that is when you are in default of making your payments to the central station. Of course this "right" should be addressed in the Dealer Agreement the central station has made you sign.
A central station that solicits a dealer's customers or diverts them to another dealer, is likely in breach of contract, the Dealer Agreement, and certainly breaching whatever "ethics and moral" the alarm industry aspires to. Any smart dealer should not be comfortable doing business with such a central station, and would do the industry a favor by revealing the name of the offending central station.
Now Dennis. Good advice, but spoken like a true transactional attorney, not a litigator, because there is nothing "much simpler and effective" way to commence litigation. A temporary injunction can only be brought after you have filed a Summons and Complaint. The motion will have to show a likelihood of success and a bond will be required. It's true that many thieves will be quickly deterred by that strategy, but it will still cost at least $7500 [and that's just for the summons and complaint and filing the motion for a temporary injunction; the lawsuit could costs tens of thousands], so the lost accounts should be worth it.
The best deterrent to losing accounts is a Standard Form Agreement and giving great service.
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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
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com
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