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Nightmare customer/ how to cancel
July 20, 2023
Nightmare customer/ how to cancel
          You know we use your contracts, albeit a version from about five years ago.
          I have a customer we installed a new residential system for. We connected to some existing wired devices including fire and then installed a full perimeter wireless system on top. There are six windows in the kitchen that is being remodeled yet to be installed. They already paid the entire balance of the contract. Little more than a month in they have already turned into a nightmare customer threatening to sue because "the system isn't functional;" they have had every weekly test come through and tripped multiple false alarms to central due to user error.
          What are my options to cut this customer loose....? I am looking at the insurance procurement clause as my best option. Any thoughts would be appreciated. Please keep me anon on the thread if you use in the newsletter.
          Let me express a few assumptions based on what you wrote and didn’t mention before offering an opinion how to proceed.
          You mention that your contracts are about 5 years old.  I have to assume that your equipment and services are also of 5 year vintage.
          You used existing older equipment as part of your new installation without using a Disclaimer Notice which would have had the customer acknowledge that you were not asked [or paid] to inspect the older system, point out deficiencies or remedy any deficiencies.
          You’re getting weekly tests but the customer is also experiencing frequent false alarms which you chalk up to subscriber error, but that really doesn’t tell me what those errors are.  Problems with existing wiring is now your problem. 
          Your job is not complete because 6 windows remain to be installed.  I will assume you have properly circumvented these openings so they are not the source of false alarms. 
          You’ve been paid in full.  I assume that’s for the installation and not for on-going after-install services of monitoring. 
          Your customer is otherwise current in payment.
          Your contract does call for the customer to obtain insurance and name you as an additional insured.  Arguably unless the customer can obtain that insurance coverage retroactively for you this would be a non-curable default entitling you to declare the customer in breach; stop service and accelerate the contract charges for the continuing services.
          Another option would be to find another alarm company who would be willing to take this account off your hands for some or no money.  You might even have to kick in a few bucks so that the windows can be completed since you’ve already been paid for the installation in full.
          Before involving another alarm company you may want to be sure you’re in the right because if you pursue collection against this customer it sounds like you’ll be facing a counterclaim or separate countersuit.  The wording of the customer’s complaint will determine if you have insurance coverage to defend the claim, but straight up breach of contract is not likely covered by your E&O coverage.
          What could you have done to avoid this mess?  Use up to date equipment and contract, Residential All in One, for starters.  Insisted on an entirely new alarm installation without relying on existing wiring or equipment.  I am not sure if activating the monitoring before the 6 new windows were installed as wise, but perhaps unavoidable. 
          Wish I could offer more but I carry a briefcase, not a bag of tricks or magic.

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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