ADT offers up to $25K to expose security sales scams

Whistle-blowers can collect if they provide evidence leading to successful civil prosecution of offending companies
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Wednesday, May 28, 2014

BOCA RATON, Fla.—ADT is offering as much as $25,000 to anyone willing to blow the whistle on security companies that train their door-to-door sales teams to use deceptive sales techniques, the home security giant announced this week.

David Bleisch, ADT general counsel, said ADT believes some sales reps working for unethical door-knocking companies want to speak out anyway, so this offer is designed to encourage them to do that. “We want to also provide additional incentive and recognition for people that are brave enough to stand up and be whistle-blowers,” he told Security Systems News.

The offer, which is good until Aug. 31, specifies that any evidence whistleblowers provide must result in a successful civil judgment against the offending company before any reward is paid. The whistle-blowers will receive either $25,000 or 25 percent of the award ADT wins, whichever is less.

Bleisch said ADT, which is based here, believes it’s the first in the industry to offer a reward to combat unethical behaviors by door-to-door security sales reps. It’s the company’s latest attempt in a years-long effort to fight such scams, which Bleisch said are on the increase.

“Based on the number of complaints we’ve received this year we think this is going to be a record year,” he said.

He said the company doesn’t have absolute numbers because not all scamming instances get reported. However, he estimated that the number of scams per year is “probably well into the tens of thousands.”

Unethical door knockers often target the elderly. Their misrepresentations include telling customers that they have an affiliation with a customer’s current service provider, such as ADT, and then making such false claims as saying that provider is going out of business in order to dupe the customer into signing a contract with a new company.

ADT, as North America’s largest security provider, with about 6.5 million customers, is a frequent target of such fraud, but so are other security companies, Bleisch noted.

“It’s a very serious problem that’s plaguing the industry and that we all need to address,” he said.

With the $25,000 reward offer, ADT is hoping for video recordings of sessions training sales reps to scam customers, Bleisch said. “[Such training] is hard to prove in a kind of ‘he said/she said’ type of situation,” he explained to SSN. “The actual video proof is the best.”

Civil court cases sometimes take years to resolve so is ADT concerned waiting that long for their reward will discourage potential whistle-blowers?

“I don’t think we’re concerned about that,” Bleisch said. “We’re trying to provide an additional incentive for people [who already feel a need to expose the wrongdoing].”

Bleisch said the proliferation of recording devices makes video evidence possible. “As long as it’s done lawfully, we’re interested in getting that data to try to expose fraudsters and shut it down,” Bleisch said.

ADT says it has such video evidence of a sales training session by Utah-based door-knocking company Vision Security, in which it says sales reps were being taught to lie to customers. ADT is suing Vision, which denies wrongdoing, in federal court.

Vision is among door-knocking companies that have said that any deceptive sales techniques were used by “rogue” sales reps.

Efforts ADT has made in the past to fight sales scams included being part of a 2009 lawsuit that targeted such rogue sales staff individually, and calling for an industry code of ethics for door-to-door sales. That’s something that the Electronic Security Association (ESA) now promulgates, Bleisch said.

Such efforts helped create more awareness and helped reduce the number of scams but now the problem is again on the rise, he said.

ADT continues to aggressively go after offending companies in court. In 2013, it ADT says it won more than $4 million from such companies as a result of lawsuits.

Most of that money came from two settlements ADT reached late last summer with companies it had sued. One settlement was with California-based Security One, which agreed to pay ADT $1.5 million. The other was with Vision Security—the Orem, Utah-based company that ADT says it has incriminating video evidence against—and Florida-based Security Networks, of which Vision is an affiliate. Those companies had to pay ADT $2.2 million.

But ADT sued Vision again just a few months later, contending that company violated its agreement not to engage in further deceptive practices. That’s something Vision denies. A federal judge this April put a 45-day hold on the court case for the two companies to see what can be resolved under their previous settlement agreement.

ADT contends that its evidence against Vision was given to it by former Vision Security managers, who “provided ADT with copies of audio and video recordings of Vision sales agent training sessions.” ADT says “those recordings show Vision has been training its sales force to sell alarm systems by posing as GE technicians, making service calls to upgrade customers’ alarm panels at no cost at the direction of local police and fire departments.”

He said the reward offer extends to Aug. 31 to coincide with the summer selling season. However, if the incentive proves effective, it could be continued, Bleisch said.

“We’re looking forward to hopefully having more impact and trying to stem this tide,” Bleisch said.