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Stealing customers / register for webinars

May 29, 2020
Title:  What do sellers need to look for in the buy-sell transaction
When:  June 2, 2020 12 PM EST.
Presented by:  Ken Kirschenbaum,Esq.  Guest panelists:  Victor Harding, Mitch Reitman, Rory Russell, Dennis Stern,Esq
Who should attend:  Alarm owners for sale or thinking of selling
Register here:

Title:  selling and installing thermal imaging cameras and liability exposure
When:  June 4, 2020 12 PM EST.
Presented by:  Ken Kirschenbaum,Esq.  Guest panelists: Barry Levine, Pres of Sperry West
Who should attend:  owners, managers, sales people

Stealing customers
            If a customer is signed up for about a year or so and a sales representative by door or phone knowingly are aware that the customer signed with that company and know she or he is in a 5 year contract can the company be liable as well as the customer? 
    Now I will tell you one was an ADT door knock rep and said he would take care of it for them and get it canceled out.  And the other Monitronics reps by phone offering lower rates coaching them and telling customers were a scam and they never heard of us on multiple accounts. They were prior Monitronics customers but Monitronics even months later convinces them to come back telling the customer we scammed them and we are a scam and yeah much more.  As a result our equipment has been ripped out and we took a loss because of their unethical practices that took place. Please let me know your thoughts and if you wanna put this in a blog about stealing customers please do so.
    To answer your question, yes, the company can certainly be held liable for stealing your subscribers and tricking them into signing new contracts. I think the bigger concern should be whether there is any way to stop them from continuing to do this going forward.  If there are sales reps who have gone after your subscribers, in all likelihood, they are going after as many of your accounts as possible.  Covid-19 may have temporarily stalled any door to door sales activity but you should assume that the second the world reopens the poaching will continue.  Typically, by the time these situations turn into a lawsuit, one company has tried poaching another company’s subscribers throughout an entire state. 
    The companies whose subscribers are poached often end up filing a lawsuit alleging deceptive sales practices seeking money damages and a court order prohibiting the other company from continuing to poach subscribers.  A few years ago, ADT filed lawsuits against three different companies alleging the use of deceptive practices that misled ADT subscribers after hundreds of ADT subscribers complained.  In those cases, ADT subscribers were misled by representatives of other companies who either claimed their system required an upgrade or that the representative was somehow affiliated with ADT, eventually leading to the subscriber signing a new contract with that company.  ADT ultimately settled with these three companies for $3 million, $1.5 million and $1 million and the court also issued an injunction preventing those three companies from continuing to allow its representatives to engage in such behavior. Furthermore, last year ADT was awarded $3 million in a deceptive sales lawsuit against Northstar.  The year before, ADT accused Vivint of misleading and stealing its subscribers and Vivint agreed to pay $10 million to ADT as damages.  
    Other than a deceptive sales lawsuit, you should also report these incidents to the appropriate state licensing agency and state attorney general.  This may not benefit your company directly, but it will punish the company poaching your subscribers to such a degree that you most likely will not have to worry about it continuing.  Vivint is one of the companies that comes to mind as far as those accused of violating state consumer protection laws and committing deceptive sales practices by misleading subscribers and tricking them into signing new contracts. Last year, the California attorney general and Vivint reached a $1.4 million settlement as a result of Vivint being accused of violating California’s consumer protection act.  Not even one year earlier, Vivint agreed to pay $100,000 for nearly identical behavior in Wisconsin.  
    It is vital that you take a moment to examine your own company to make sure you are compliant on all fronts.  Most important is that your contracts are properly drafted, enforceable and in absolute compliance with all applicable contractual, consumer protection, licensing and other laws relevant to the contract’s enforceability in regards to each specific state.  Each state requires a different contract that complies with that state’s specific legal requirements.  If you are using the same contract for more than one state or if you are not sure whether you are using compliant, up to date contracts visit or contact our Contract Administrator Eileen Wagda at for assistance.
Jesse Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum
            The legal causes of action for stealing accounts are inducing breach of contract, conversion and deceptive business practices.  Those engaging in stealing accounts may find themselves liable to the state [for causing damage to the public at large] and to those they steal from.  But just because a competitor takes your accounts doesn't mean that the other company has engaged in any improper conduct.  For example, the customer could have contacted the other company for any number of reasons.  It is not incumbent on the other company to save the account for you.  It wouldn't be improper for a company to mass market and advertise its services and then accept whatever business comes its way.  There isn't even anything wrong with the company offering its services for less money, though some lawyers may think that's enough to cross the line.
            The line gets crossed when a company targets your accounts, knowingly and purposely.  In doing so the company engages in tactics such as claiming it is really your company coming in for an inspection, telling your customers that you are no longer in business, or won't be for long, or conveying disparaging remarks about you or your company that are not true.  There is another element you will have to establish before you could claim to have been wronged and damaged; you need to show that you have an enforceable contract with the customer that was interfered with. If you don't have a contract or it's in month to month renewal, you are going to have a hard time establishing damages, assuming you make it over the hurtle of liability.
            Many claim that the most prevalent offenders are the door knockers.  I know that seems to have a very negative connotation, door knocker, but I have to say give respect where deserved.  These "door knockers" are highly trained sales people and extremely effective.  Not all, in fact I suspect most, conduct themselves in perfectly legitimate ways and don't engage in improper conduct.  I do not believe that upper management who use door knockers condone improper behavior.  If you believe you are affected by improper conduct a call to the offending company may get you some results, including a cessation of improper activities.
            Reaching out to and staying in touch with your customers may actually be the best protection against the door knockers.  Reminding your customers that they are under contract with you is another good idea.  Making sure you have the most up to date contracts, signed by your customers, in current original term, is the best idea.

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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