KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Should you cancel central station charges on 3G customers who lost monitoring but still pay / ISC meeting ideas
February 10, 2023
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Should you cancel central station charges on 3G customers who lost monitoring but still pay
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Ken,
Something your January 25, 2022 article doesn’t cover is, can we cancel the monitoring cost with our vendor (monitoring station and/or Alula/Alarm.com/etc…) on a 3G customer account who has not responded to any of our numerous notices to upgrade their 3G cellular communicator even though the customer continues to pay us for the monitoring?
I grasp that we can continue to bill them and receive the customer’s money for a non-functioning 3G communicator because it is the customer’s responsibility to ensure the communication pathway works, but can we cancel our vendor cost for that customer? Maybe you covered this in one of your other articles but I didn’t find it in your archive.
Starting around July of 2020 we sent letters, made calls, sent emails (read receipts), notified them through their alarm.com app and every other form of communication. Some we’ve knocked on their door. The only thing we haven’t tried is smoke signals and flare guns to get their attention to upgrade their 3G communicator that is no longer working, but they pay their invoice each month. So our assumption is, right or wrong, they are receiving our communications if they are paying their bill each month.
Thanks,
Anonymous
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Response
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This is a tuff call; it’s not entirely a legal issue nor is it entirely a moral or ethical issue. I suspect you have made a false assumption, that your customers are getting your communication and therefore understand that they are paying for no monitoring. It’s just as likely that they ignore your communications. You don’t mention whether the payments being made are auto-pay or you get checks. If you get checks you don’t mention if the checks come from the subscriber or a third party source who may not know the alarm monitoring doesn’t work. I assume that you have determined that these subscribers no longer have working monitoring service.
It does seem futile to continue paying the central station monitoring charges. I suppose you could and either retain all the subscriber monitoring money or you could start to charge a reduced amount to reflect the cost of performance expense; your savings on the account. This is probably more trouble than it’s worth.
I’m not the judge on the case [or the class action attorney figuring out how to reach a few deep pockets] so, as advocate for the alarm industry, my position is let’s look at the contract, which I know states that the subscriber has the obligation to maintain communication pathways, i.e., telephone service, and to notify you if repairs to the alarm equipment is required. Here the subscriber has failed to maintain communication pathway service, failed to test the alarm operation and failed to request service. On the other hand, the communication pathway actually works, just not on the alarm panel, and how would the subscriber know that? There could be lots of reasons why a subscriber continues to ignore your communications and continues to pay. One reason is that they aren’t that smart, but that’s not going to help you in a lawsuit.
Your question leads me to think that your immediate concern is whether you should charge, keep the money and send the central station money for nothing. You’re missing the big picture, and that would be a horrific loss and a claim that alarm monitoring failed. Going to be a lot of finger pointing; should have made sure the monitoring was working; you installed the cellular; you kept billing. Of course we know what your response will be; subscriber should have and could have, etc.
My recommendation is that you continue paying the central station, especially if you’re not going to terminate the subscriber and stop accepting payment for monitoring. You have the option of declaring the subscriber in breach of the contract, terminate service and demand the contract balance as provided in the contract. [my advice is limited to those using Kirschenbaum Contracts™ because otherwise I have no idea what your contractual obligations are]. That implies that I suggest you continue charging the subscriber. I do think that you need to have exhausted every effort to inform the subscriber that monitoring is inoperable. You should document the efforts and retain them in case you need them. A visit to the premises should be made unless it’s impossible because of the number of accounts, but some real efforts needs to be made.
Other comments, legal or otherwise, are welcome. Perhaps this is a good topic for a round table discussion at ISC West. Anyone who wants to lead a group discussion, or attend one, or a private meeting, should get in touch with K&K’s Concierge Coordinator Stacy Spector,Esq at 1 516 747 6700 x 304. We are at the idea stage of planning for ISC and your ideas will be helpful.
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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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