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Pinnacle Security

Illinois fines Pinnacle $1m for alleged deceptive sales practices

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Wednesday, October 31, 2012

I just learned today that summer-sales-model company Pinnacle Security has agreed to pay a $1 million fine in a long-term settlement to the state of Illinois for such alleged violations as “slamming” customers and even hiring felons as sales reps.

In reaching the agreement, Pinnacle neither admitted nor denied the allegations. And the company sent me the following statement:

Pinnacle Security is pleased that it has come to a settlement with the Department of Financial and Professional Regulation of the State of Illinois to the parties' mutual satisfaction. Pinnacle Security has worked closely to address the generally historical issues related to licensing requirements of our sales representatives that allegedly took place as early as 2006.

Since 2010, Pinnacle has implemented industry-leading compliance initiatives to help ensure that Pinnacle's sales representatives meet all city, county and state licensing requirements.  We are confident that through this agreement, Pinnacle will continue to provide its thousands of customers in the state of Illinois superior support and customer service.

Here’s what the state said in its Oct. 31 news release:

State regulators announced today they have reached a long-term settlement agreement with Pinnacle Security, LLC, headquartered in Orem, Utah and licensed to sell home and business security systems in Illinois.  The Department of Financial and Professional Regulation (IDFPR) alleged in its order that Pinnacle had sold its services using unfair and deceptive trade practices, knowingly hired unlicensed sales personnel, and allowed employees with criminal histories to sell their products door-to-door to Illinois consumers.  The company also ‘slammed’ consumers by changing their alarm service using fraudulent and deceptive means.

“When homeowners purchase security systems to protect their families from crimes, they should at least be assured that the company with which they do business is following Illinois laws,” said Jay Stewart, Director, Division of Professional Regulation, IDFPR.  “With this settlement agreement, families doing business with Pinnacle Security, LLC will know that Illinois’ consumer protection agency is making sure they meet their obligations.”

The investigation conducted by IDPFR included issuing subpoenas for all employees working in Illinois and found that 700 of the 1,100 were not licensed by the state.  Further, several of the employees listed on the employee roster had been charged with or convicted of felonies, including larceny, robbery, theft, conspiracy to commit burglary, aggravated criminal sexual abuse, assault, domestic battery, and possession of controlled substances, any of which would have been cause to deny a license, had an application been filed.

The case was referred to IDFPR by Illinois Attorney General Lisa Madigan, after her office settled a lawsuit to protect prospective customers.   Today’s settlement includes payment of a one million dollar fine, of which $250,000 has already been paid, a two-year ban on new sales to Illinois consumers, supervision of Pinnacle’s ongoing business of overseeing already installed security systems and five years of supervised probation by the Illinois.

Pinnacle has settled similar complaints made by other states, although the amount of this fine stands out.

Pinnacle has told Security Systems News that the company had some issues in past years with “rogue” door-knocking sales staff.  However, in 2010, Pinnacle made a company cultural shift to emphasize a code of ethics for employees and the implementation of new ways to monitor their behavior and enforce the code.

 

Pinnacle sells 93,000 accounts to Monitronics

Pinnacle says the $131 million transaction reduces debt, putting it in a better growth position
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10/31/2012

OREM, Utah—Pinnacle Security, a leading summer-sales-model company based here, recently announced an alliance with Monitronics International in which Pinnacle has sold Monitronics about 93,000 accounts and made an agreement for future account sales. The accounts represent $4.4 million of gross RMR, according to a news release.

‘Make sure mobile is part of the solution you offer’

Industry experts say mobile apps must be part of a successful security business today
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09/07/2012

A smart revolution quietly occurred this year—one that’s dramatically changing the security industry.

As of February, a Nielsen report showed, about half of all Americans with mobile phones—49.7 percent—now own smartphones. And the number of smartphone owners is rapidly growing.

Pinnacle corralling customers with geofences

The summer model company believes new Geo-Services technology could make customers 'stickier'
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08/01/2012

OREM, Utah—Pinnacle Security believes geofences could help keep its customers from straying.

The leading summer-sales-model home company, based here, recently announced the launch of Alarm.com’s Geo-Services technology. With the free service, customers can set geofences, which are perimeters around locations, using an iPhone or Android device. When they leave or enter the geofenced area with the hand-held device, they get automatic reminders sent to the device to remind them to arm or disarm their system.

Devcon closing more branches

Reductions in company expenses and streamlining are designed to ‘set the stage for future success,’ CEO says
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07/11/2012

HOLLYWOOD, Fla.—Devcon Security—a super-regional based here that grew to a national player in the past year and a half—is downsizing to reduce expenses and strengthen the company’s finances for future profitability and growth, according to Devcon’s new CEO, Steve Hafen.

Pinnacle settles Missouri AG complaint

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Monday, April 23, 2012

Pinnacle Security, an Orem, Utah-based summer-sales-model company, has reached a $76,000 settlement with the state of Missouri over a complaint filed last year regarding alleged deceptive sales practices from a few years back. As part of the consent agreement, Pinnacle has promised to monitor its door-to-door sales reps more closely, according to a recent news release from Missouri Attorney General Chris Koster.

I asked Pinnacle about the settlement, which the AG announced April 20 and here’s what the company had to say:

Pinnacle Security is very pleased that it has resolved the Missouri Attorney General's lawsuit to the parties' mutual satisfaction.  Over the last several months, Pinnacle worked cooperatively with the AG's office to address issues related to customer complaints regarding certain alleged sales practices that occurred primarily during the 2008 and 2009 summer sales seasons.
 
Since 2010, Pinnacle has implemented industry-leading compliance initiatives to help ensure that Pinnacle's customers are treated honestly and fairly.  As part of its agreement with the Attorney General's office, Pinnacle will continue to ensure that its Missouri customers receive superior customer care and service.  Pinnacle looks forward to continuing its relationship with the State and to protecting the security of Missouri's citizens.

Pinnacle, which sells nationwide and in Canada, said when the company settled a complaint with the Florida attorney general earlier this year that the company had some issues in past years with “rogue” door-knocking sales staff.  However, in 2010, Pinnacle made a company cultural shift to emphasize a code of ethics for employees and the implementation of new ways to monitor their behavior and enforce the code.

Here’s more from the AG’ release announcing the agreement:

Under the settlement, Pinnacle will provide $46,000 in refunds to customers in Missouri who were misled about Pinnacle’s relationship with other security companies, the cost of its services, or its cancelation policy. Pinnacle will also pay $12,500 to the Missouri Merchandising Practices Revolving Fund and $17,500 in civil penalties to the state.

Additionally, Pinnacle must reform its sales practices to ensure consumers understand the important terms of the contract before purchasing, including the company with which they are contracting, the monthly price for the service, the total duration of the contract, and any restrictions on cancelation. The settlement, embodied in a consent judgment filed today in St. Louis County Circuit Court, also obligates Pinnacle to monitor its sales representatives who conduct door-to-door sales more closely. ...

The settlement resolves a lawsuit filed in May 2011, in which the Attorney General’s Office alleged that Pinnacle induced consumers to purchase by misrepresenting that they were associated with the consumer’s current alarm company and that the consumer would receive free services when the services were not free. The suit also alleged that consumers were told they could cancel at any time when in fact consumers had to pay for the entire 39-month contract if they did not cancel within three days.

In addition to the $46,000 in restitution, Pinnacle will also pay refunds to any consumer who files a new complaint within the next four months and provides documentation showing they were induced to enter a contract with the defendant using unfair or deceptive practices.

 

Alarm.com: New Smart Schedule smart for dealers

New feature matches home activity to thermostat schedules and makes customers ‘stickier’
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04/02/2012

VIENNA, Va.—Alarm.com has added a new feature to its emPower home automation and energy management platform, one that it says makes homeowners even more invested in their security systems because it allows them to use data the security systems collect to better program their thermostats to save energy and money.

Shake-up at Devcon: Hafen replaces Ginsburg as CEO

Industry veteran Richard Ginsburg departs just weeks after taking job; former Pinnacle COO Steve Hafen now at helm
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03/21/2012

HOLLYWOOD, Fla.—Devcon Security has a new CEO—its second one in about three weeks.

“The Trip to Bountiful”: Comcast now "at home" in Utah

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Wednesday, March 21, 2012

Comcast is now selling home security in Utah, right in the backyard of the major summer-model security companies.

When it comes to telecoms and cable companies getting into home security, I’ve written before about how Comcast has been in the forefront of that trend. It launched its Xfinity Home Security product in 2010.

It also recently renamed the product as just Xfinity Home to reflect the fact that the service includes many home automation features in addition to home security.  And Comcast has launched the product in numerous major markets around the country and continues to introduce Xfinity Home in even more places. For example, it had a Seattle launch in February and this month Comcast announced it’s now offering the service in Utah, home to residential security giants like Vivint and Pinnacle Security.

I’ll be talking to them about their take on this new player both in their home state and nationwide. Keep your eye on this site for more!

Richard Ginsburg new CEO of Devcon Security

Former Pro 1 CEO is back in the security business
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02/29/2012

HOLLYWOOD, Fla.—Golden Gate Capital, the owner of Devcon Security—a super-regional based here that has been rapidly expanding as a national player in the past year—has named Richard Ginsburg as Devcon’s new CEO.

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